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UNIVERSITY  OF  CALIFORN!/ 
AT   LOS  ANGELES 


MORE  FACTS  AND  FALLACIES 

OF  COMPULSORY 

HEALTH  INSURANCE 


,   By  FREDERICK  L.  HOFFMAN,  LL.  D. 

Third  Vice  President   and   Statistician   The   Prudential    Insurance  Company  of 

America,  Fellow  American  Statistical  Association,  Fellow  Royal  Statistical 

Society,  Honorary  Member  Actuarial  Society  of  Switzerland,  Member 

International  Actuarial  Congress,  Associate  Fellow  American 

Medical  Association,  Member  American  Association  for 

the  Advancement  of  Science,  Member  Executive 

Committee  National  Civic  Federation,  etc. 


A  SUMMARY 

of  Papen  r*ad  «t  the  National  Conference  of  State  Manufacturers,  Pittsburgh,  Pa.,  January  11.  1918; 
Michigan  Manufacturers'  Association,  Detroit,  Mich.,  May  15,  1918;  West  Virginia  Manufacturers' 
Association,  Huntington,  W.  Va.,  January  16.  1919;  Toledo  Academy  of  Medicine,  Toledo,  Ohio, 
March  7,  1919;  Eighth  Annual  Conference  of  Industrial  Physicians  and  Surgeons,  Pittsburgh,  Pa., 
March  14,  1919;  Discussions,  Committee  on  Social  Insurance,  National  Civic  Federation.  New  York. 
May  19  and  June  19.  1919;  New  Jersey  Medical  Society.  Spring  Lake,  N.  J.;  luae  25,  1919  etc., 
etc.;  materially  enlarged,  thoroughly  revbed  and  brought  down  to  date. 


(REVISIiD  FINAi.   HDITION) 


MORE  FACTS  AND  FALLACIES 

OF  COMPULSORY 

HEALTH  INSURANCE 


By  FREDERICK  L.  HOFFMAN,  LL.  D. 

Third   Vice   President    and    Statistician   The    Prudential    Insurance   Company   of 

America,  Fellow  American  Statistical  Association,  Fellow  Royal  Statistical 

Society,  Honorary  Member  Actuarial  Society  of  Switzerland,  Member 

International  Actuarial  Congress,  Associate  Fellow  American 

Medical  Association,  Member  American  Association  for 

the  Advancement  of  Science,  Member  Executive 

Committee  National  Civic  Federation,  etc. 


A  SUMMARY 

of  Papers  read  at  the  National  Conference  of  State  Manufacturers.  Pittsburgh.  Pa..  January  11,  1918; 
Michigan  Manufacturers'  Association.  Detroit,  Mich.,  May  15.  1918;  West  Virginia  Manufacturers' 
Association,  Huntington,  W.  Va..  January  16,  1919;  Toledo  Academy  of  Medicine,  Toledo,  Ohio, 
March  7,  1919;  Eighth  Annual  Conference  of  Industrial  Physicians  and  Surgeons.  Pittsburgh,  Pa., 
March  14.  1919;  Discussions.  Committee  on  Social  Insurance.  National  Civic  Federation.  New  York, 
May  19  and  June  19  1919;  New  Jersey  Medical  Society,  Spring  Lake,  N.  J.;  June  25,  1919  etc.. 
etc.;  materially  enlarged,  thoroughly  revised  and  brought  down  to  date. 


1920 

PRUDENTIAL  PRESS 

NEWARK,  N.  J. 

U.  S.  A. 


I  ••  • 


CONTENTS 

Page 

Introduction 5 

First  Report  of  the  Social  Insurance  Commission  of  California, 
January,  1917 11 

First  Report  of  the  Massachusetts  Special  Commission  on  Social 
Insurance,  February,  1917 35 

First  Report  of  the  Commonwealth  Club  of  California,  June,  1917 .   42 

Report  on  Health  Insurance  by  the  New  Jersey  Commission  on  Old 
Age,  Insurance  and  Pensions,  November,  1917 53 

Second  Report  of  the  Massachusetts  Special  Commission  on  Social 
Insurance,  January,  1918 62 

Second    Report    of    the    Commonwealth    Club     of     California, 

October,  1918 70 

Report  of  the  Wisconsin  Special  Committee  on  Social  Insurance, 

January,  1919 80 

Report  of  the  Connecticut  Commission  on  Public  Welfare,  January, 
1919 87 

Report  of  the  Ohio  Health  and  Old  Age  Insurance  Commission, 
Februar}^  1919 94 

vSecond  Report  of  the  Social  Insurance  Commission  of  California, 
J  March,  1919 105 

I     Preliminary  Report  of  the  Illinois  Health  Insurance  Commission, 
^  May,  1919 1 14 

'     Social  Insurance  in  the  United  States 129 

r^^  Industrial  Insurance  in  Force  with  the  Victoria  Life  of  Berlin 136 

!y    Industrial  Insurance  in  Force  in  the  United  Kingdom 136 

National  Health  Insurance  in  Great  Britain,  1911-1919 137 

Appendix  A,  Some  Lessons  of  the  German  Failure  in  Compulsory 
Health  Insurance 181 


.'V7(»H<)<) 


SCIENTIFIC  PUBLICATIONS 


STATISTICIAN'S  DEPARTMENT 

Till';  PRUDENTIAL  INSURANCE  COMPANY  OF  AMERICA 

HOME  OFFICE,  NEWARK,  NEW  JERSEY 

(AVAILABLE  ON  REQUEST) 

INDUSTRIAL  HYGIENE 
Industrial  Accidtiits  and  Their  Relative  Frequency  in  Different  Occupations  (1914). 
The  Mortality  from  Diseases  of  the  Lungs  in  American  Industry  (1916). 
Some  Theoretical  and  Practical  Aspects  of  Industrial  Medicine  (1917). 
Mortality  from  Respiratory  Diseases  in  Dusty  Trades — Inorganic  Dusts  (1918). 
Menace  of  Dust,  Gases  and  Fumes  in  Modern  Industry  (1918). 

HEALTH  INSURANCE 
Facts  and  l'"allacies  of  Compulsory  Health  Insurance  (1917). 
Public  Health  Progress  Under  vSocial  Insurance  (1917). 
Autocracy  and  Paternalism  versus  Democracy  and  Liberty  (1918). 
Failure  of  German  Compulsory  Health  Insurance:  A  War  Revelation  (1918). 
More  Facts  and  Fallacies  of  Compulsory  Health  Insurance  (1919). 

CANCER 
Educational  Value  of  Cancer  Statistics  (1914). 
Accuracy  of  American  Cancer  Mortality  Statistics  (1914). 
The  Mortality  from  Cancer  Throughout  the  World  (1915). 
Cancer  from  the  Statistical  Standpoint  (1916). 

MALARIA 

A  Plea  and  a  Plan  for  The  Eradication  of  Malaria  in  the  Western  Hemisphere  (1916). 
The  Malaria  Problem  in  Peace  and  War  (1918). 

MISCELLANEOUS 
Rural  Health  and  Welfare  (1912). 

LTniformity  of  Annual  Reports  of  Local  Boards  of  Health  (1913). 
The  Chances  of  Death  and  The  Ministry  of  Health  (1913). 

The  Economic  Progress  of  the  United  States  During  the  Last  Seventy-five  Years(1914) 
American  Public  Health  Problems  (1915). 
Leprosy  as  a  National  and  International  Problem  (1916). 
The  Sanitary  Progress  and  Vital  Statistics  of  Hawaii  (1916). 
On  the  Physical  Care  of  Children  (1916). 
The  Tuberculosis  Death  Rate  in  1916  (1917). 
Army  Anthropometry  and  Medical  Rejection  Statistics  (1917). 
The  Mortality  from  Degenerative  Diseases  (1918). 

A  Plfin  for  a  Slore  Effective  Federal  and  State  Health  Administration  (1919). 
Pauper  Burials  and  the  Interment  of  the  Dead  in  Large  Cities  (1919). 
Some  Statistics  of  Influenza  (1919). 

CHARTS 

Typical  Causes  of  Death  Infant  Mortality  Typhoid  Fever 

Cancer  Infantile  Paralysis  Accidents 

Influenza  Diphtheria  Mortality  of  the  United  States 

Leprosy  Measles  and  Germany 

Malana  Scarlet  Fever  Pauper  Burials 

Tuberculosis  Whooping  Cough  Armv  Anthropometry 


MORE  FACTS  AND  FALLACIES 
OF  COMPULSORY  HEALTH  INSURANCE 


INTRODUCTION 

Progress  in  popular  law-making  and  the  perfection  of  the  princi- 
ples of  administrative  policy  are  vital  to  the  preservation  of  a  truly 
republican  form  of  government.  The  ever-present  menace  to  democ- 
racy and  liberty  is  the  perversion  of  the  legislative  function  and  the 
disregard  of  the  dictum  that  ours  is  a  government  of  law  and  not  of 
men.  The  vast  gulf  which  separates  autocracy  from  democracy  is 
no  less  hopeless  of  being  successfully  bridged  than  the  error  that 
similarity  in  results  can  be  achieved  by  a  people  governed  in  their 
rights  and  privileges  by  the  Roman  law  common  to  the  countries  of 
continental  Europe  and  one  governed  in  their  rights  and  privileges  by 
the  English  common  law,  which  by  our  constitution  was  made  the 
basic  foundation  of  the  legal  principles  which  prevail  in  the  United 
States  of  America.  The  freedom  which  we  enjoy  is  as  much  in  a 
measure  in  consequence  of  the  elastic  principles  of  our  common  law 
as  in  consequence  of  the  constitution,  which  has  thus  far  been  found  to 
meet  successfully  our  requirements  regardless  of  profound  changes  in 
social  and  economic  conditions.  To  the  "lawmaker"  inflexibility  no 
doubt  has  very  considerable  advantages,  but  to  the  "law-giver"  all 
legislation  is  essentially  a  question  of  principles  in  conformity  to  the 
fundamental  law  of  the  land.  These  observations  apply  with  peculiar 
force  at  the  present  time  to  the  propaganda  for  so-called  compulsory 
health  insurance,  which  is  as  un-American  as  it  is  unnecessary,  and  as 
essentially  a  product  "made  in  Germany"  as  any  legislative  panacea 
brought  forward  for  the  alleged  good  of  the  people  during  a  generation 
or  more.* 

The  propaganda  had  its  origin  in  the  program  laid  down  by  the 
International  Association  for  Labor  Legislation,  which  held  its  first 
meeting  in  Basle,  vSwitzerland,  in  1901.  At  this  meeting,  as  has  been 
the  case  at  all  subsequent  international  gatherings  of  this  kind, 
Germany  was  thoroughly  well  represented,  and  her  official  delegates 
have  invariably  assumed  a  leading  and  often  dictatorial  position  con- 

*See  the  Parliamentary  papers  published  by  the  British  Government  on  "Medical  Benefit  under 
German  Sickness  Insurance"  and  "Memorandum  on  Sickness  Insurance  in  Germany",  London.  191 1, 
as  a  basis  for  the  British  National  Health  Insurance  Act,  etc. 


tTriiiiiK  tlu-  subject  of  social  insurance  and  legislation,  national  or 
intcriialional,  more  or  less  pertinent  thereto.  The  American  branch 
of  this  association,  it  is  true,  did  not  at  the  outset  seriously  concern 
itself  Willi  this  question,  because  of  public  indifference  to  what  at  the 
lime  stcnicd  to  be  merely  questions  or  problems  of  academic  interest. 
The  early  agitation  was  sustained  largely  by  American  professors  of 
economics  and  sociology  trained  at  German  universities  and  strongly 
imbued  with  the  German  viewpoint  in  matters  of  social  reform.  The 
dcploral)le  state  of  the  employers'  liability  law  and  the  urgency  of  far- 
reaching  reforms,  ultimately  resulting  in  the  practically  nation-wide 
adoption  of  the  principles  of  workmen's  compensation  for  industrial 
injuries,  did  much  to  encourage  a  growing  interest  in  a  field  of  social 
inc[uiry  practically  inclusive  of  every  phase  of  the  broader  sphere  of 
industrial  relations.  Insurance  principles,  so  successful  in  the  conduct 
of  private  enterprise,  were  erroneously  assumed  to  be  applicable  to 
government  measures  aiming,  openly  or  in  disguise,  at  government 
control  in  matters  of  labor  and  industry.  The  term  "insurance"  was 
deliberately  misused  and  misconstrued  as  the  equivalent  of  labor 
security  in  a  number  of  supremely  important  relations  of  the  individual 
to  society,  chiefly  respecting  the  wage-earner  and  his  problems  of 
economic  dependence  in  the  event  of  injury,  sickness,  invalidity  or 
old  age.  The  insurance  element  of  the  so-called  German  workmen's 
insurance  system  never  did  bear  scientific  and  strictly  critical  analysis, 
for,  broadly  speaking,  and  quite  generally,  the  system  was  not  based 
upon  the  time-honored  principle  of  uniform  contributions  propor- 
tionate to  the  risk  insured  against,  but  was  in  very  fact  an  arbitrary 
method  of  taxation  proportionate  to  the  ability  of  the  several  elements 
concerned  to  bear  their  respective  burdens  under  a  plan  ingeniously 
evolved  to  disguise  the  subtle  but  ever-present  element  of  involuntary 
servitude. 

The  literature  of  what  is  called  "social  insurance"  is  not  only 
immense,  but  extremely  controversial  and  difficult  of  impartial  inter- 
pretation and  analysis.  Much  of  it  represents  exclusively  the  German 
official  viewpoint,  and  though  a  number  of  commissions  of  inquir\^ 
have  visited  Germany  for  the  purpose  of  an  impartial  study,  the  results, 
practically  without  exception,  have  been  distinctly  disappointing. 
The  investigators  merely  brought  back  the  German  official  viewpoint, 
and  they  were  content  with  superficial  observations  and  equally 
superficial  conclusions  on  extremely  important  matters  of  detail.  Of 
the  many  thousands  of  funds  and  institutions,  only  one,  the  so-called 
Communal  v^ick  Fund  of  Leipzig,  has  been  reported  upon  in  some 
detail,  but  the  true  viewpoints  of  both  labor  and  industry  have  not 


been  ascertained  and  are  not  a  matter  of  record.  Since  each  and  every 
one  of  the  large  majority  of  institutions  or  funds  has  now  a  continuous 
history  of  from  twenty  to  thirty  years,  this  omission  of  a  thorough 
investigation  is  deplorable,  and  the  more  so  because  the  data  for  an 
exhaustive  inquiry  were  at  all  times  conveniently  available  to  those 
familiar  with  the  German  language  but  not  under  the  influence  of  the 
German  official  viewpoint  or  unconsciously  willing  to  aid  the  German 
official  propaganda  interested  in  the  rapid  extension  of  this  form  of 
social  insurance  to  all  the  countries  of  the  world  with  which  the 
German  Empire  previous  to  the  war  was  in  active  international 
competition. 

An  apparent  exception  to  this  conclusion  is  a  small  treatise  on 
social  insurance  from  the  viewpoint  of  economic  analysis  by  R.  'M. 
Woodbury,  Assistant  Professor  of  Economic^  in  the  University  of 
Kansas.*  This  work  presents,  with  an  unusual  degree  of  impartiality, 
many  important  conclusions  adverse  to  the  German  system,  and  it  is 
well  deserving  of  careful  consideration,  especially  on  the  part  of  those 
who  are  concerned  with  the  effect  of  such  a  system  on  both  American 
labor  and  American  industry.  The  limitations  of  Professor  Wood- 
bury's inquiry,  however,  are  too  obvious  to  be  ignored.  The  immense 
number  of  special  reports,  the  extreme  complexity  of  the  law,  the 
widely  varying  effects  of  local  conditions,  the  numerous  changes  in  the 
law  during  recent  years,  the  practically  countless  exceptions  and  modi- 
fications all  preclude  finality  on  any  single  question  under  review, 
most  of  all  on  the  economics  of  a  measure  primarily  designed 
to  produce  far-reaching  social  reforms.  Professor  Woodbury  frankly 
concedes  at  the  outset  that  "Social  insurance,  strictly  speaking,  is  not 
insurance  at  all.  "That  being  conceded,  there  is  practically  no  alterna 
tive  to  the  conclusion,  in  strict  conformity  to  the  facts,  that  social 
"insurance"  in  any  and  all  of  its  branches  is  merely  a  modified  form  of 
voluntary  or  involuntary  taxation,  the  incidence  of  which  must,  in  its 
final  analysis,  represent  a  more  or  less  important  factor  in  the  cost  of 
production.  In  the  propaganda  for  social  insurance  overemphasis  is 
designedly  placed  upon  the  alleged  social  benefits  which  it  is  said,  in 
Germany  at  least,  have  accrued  to  the  wage-earners  and  their  de- 
pendents; but  it  is  of  much  more  importance  to  the  public  to  know 
whether  or  not  a  given  measure  or  method  of  reform  is  honestly 
framed  and  intelligently  understood  as  to  the  effect  of  its  incidence  on 
the  wage-earner's  budget  and  as  a  factor  not  only  in  the  cost  of 
living  but  also  in  the  very  political  life  of  the  nation  itself.  If 
social  insurance  "is  not  insurance"  in  the  strict  sense  of  the  term,  it 

•Now  with  the  Federal  Children's  Bureau. 


is  merely  a  pretense  of  social  reform  parading  under  a  name  which,  by 
common  consent,  stands  for  one  of  the  most  important  thrift  functions 
of  the  i)eople  of  every  civili/x-d  country  throughout  the  world.  Since 
all  insurance  rests  upon  a  voluntary  basis,  and  to  that  extent  typifies 
the  moral  progress  of  a  people,  it  is  a  wrongful  procedure  to  apply  this 
term  to  a  government  measure  in  which  true  social  progress  is  arrested 
by  a  sham  reform,  certain,  in  course  of  time,  to  react  disastrously  upon 
the  life  and  the  labor  of  the  people  concerned. 

The  propaganda  for  social  insurance,  and  chiefly  that  branch  of  it 
which  in  this  country  has  been  misnamed  "compulsory  health  insur- 
ance," had  its  origin  not  with  the  people,  in  response  to  a  law-making 
impulse  normal  to  life  in  a  democracy,  but  with  the  American  Asso- 
ciation for  Labor  Legislation  as  a  branch  of  the  International  Associa- 
tion for  Labor  Legislation,  whose  central  ofhce  from  the  outset  has 
been  at  Zurich,  Switzerland.  The  agitation  was  not  initiated  by  a 
representative  of  organized  labor  or  industry,  but  merely  carried  for- 
ward by  a  small  group  of  "Social  workers"  in  fateful  imitation  of 
German  methods  of  propaganda,*  typified  by  numerous  exhibits,  etc., 
at  practically  every  international  exposition  for  twenty  years  or  more. 
The  propaganda  is  therefore  not  American  in  its  origin  and  does  not 
rest  upon  a  sound  basis  of  facts  and  experience  derived  from  trust- 
worthy sources  and  suggestive  of  the  urgency  of  the  adoption  of  the 
proposed  measures  on  the  part  of  the  American  people,  but  evidently 
upon  theory,  conjecture  and  guesswork  opinion.  The  bills  providing 
for  the  introduction  of  compulsory  health  insurance  on  the  part  of  the 
several  States  were  not  introduced  in  response  to  a  healthy  and  active 
local  interest,  but  in  a  uniform  manner  "by  request"  on  the  initiative 
of  the  American  Association  for  Labor  Legislation,  with  its  head- 
quarters in  the  city  of  New  York.  During  1916,  according  to  the 
official  report  of  the  association,  some  13,000  copies  of  tentative  drafts 
of  compulsory  health  insurance  measures  were  widely  distributed 
throughout  the  several  States,  and  during  the  same  year  a  so-called 
"brief"  for  health  insurance  was  issued,  representing  ostensibly  the 
results  of  an  exhaustive  and  impartial  investigation  on  the  part  of  a 
special  committee  originally  appointed  in  1912.  The  first  bills  were 
introduced  in  the  States  of  Massachusetts,  New  Jersey  and  New  York. 
During  the  legislative  session  of  1917-18,  so-called  standard  or  model 

•There  arc  those  who  deny  emphatically  and  unequivocally  that  the  propaganda  for  compulsory 
health  insurance  had  its  inception  in  Germany  and  is  based  largely  upon  German  ideas  of  government 
and  social  progress.  There  can  be  no  better  authority  than  Mr.  Lloyd  George,  who.  in  his  introduction 
to  L.  G.  Chiozza  Money  s  book  on  "Insurance  versus  Poverty,"  writes  that  "In  Germany  the  inception 
of  the  scheme  was  not  unaccompanied  by  discontent,  unpopularity,  and  gloomy  prophecies.  Its  success 
is  now  triumphant,  unquestioned  alike  by  employers  and  employed.  It  was  from  Germany  that  we 
who  were  privileged  to  be  associate*!  with  the  application  of  the  principle  to  the  United  Kingdom  found 
our  first  inspiration,  and  it  is  with  her  experience  before  us  that  we  feel  confident  of  the  future." 

8 


bills  were  introduced  upon  the  plea  that  "There  is  no  other  measure 
now  before  the  public  which  equals  the  power  of  health  insurance 
towards  social  regeneration."  There  were  bills  introduced  in  some 
twenty  States,  and  references  are  made  to  the  alleged  urgency  of  the 
proposed  measures  in  the  messages  of  the  governors  of  Nevada,  New 
Hampshire,  Wisconsin,  Massachusetts,  etc.  Special  commissions  of 
inquiry  were  appointed  at  this  time  by  the  States  of  Massachusetts  and 
California,  but,  regardless  of  the  nation-wide  propaganda  fostered  and 
furthered  almost  exclusively  by  the  American  Association  for  Labor 
Legislation,  not  a  single  bill  was  enacted  into  law,  nor  did  a  single  com- 
mission whose  report  has  been  made  public  express  itself  in  favor  of 
the  enactment  of  the  so-called  "standard  bill"  or  suggest  a  measure 
more  or  less  in  conformity  to  its  principles  and  methods  of  procedure. 

The  reports  of  the  several  legislative  commissions  are  properly 
deserving  of  thoughtful  consideration.  A  thoroughly  critical  review 
would  bring  to  light  much  new  information  urgently  required  on  the 
part  of  the  public  in  aid  of  an  effort  to  bring  about  a  thorough  under- 
standing of  the  true  plan  and  scope  of  the  proposed  legislation  and  the 
possibility,  near  or  remote,  that  the  benefits  aimed  at  may  be  achieved 
at  reasonable  cost.  In  strict  conformity  to  the  principles  which  govern 
in  a  democracy,  the  commissions  of  inquiry  should  concern  themselves 
with  the  public  viewpoint  rather  than  with  the  so-called  evidence 
more  or  less  forced  upon  them  by  the  American  Association  for  Labor 
Legislation.  The  first  California  commission  appointed  one  of  the 
members  of  the  Social  Insurance  Committee  of  the  American  Associa- 
tion for  Labor  Legislation  as  its  chief  investigator,  with  the  result  that 
the  report  bears  too  obviously  the  stamp  of  partiality  and  unscientific 
inconclusiveness.  Following  the  earlier  commissions  of  California 
and  Massachusetts,  the  subsequent  official  investigations  have  been 
along  broader  lines,  with  a  due  regard  to  the  duty  of  an  inquiry  into 
the  facts  rather  than  to  a  consideration  of  so-called  evidence  presented 
by  representatives  of  the  American  Association  for  Labor  Legislation. 
The  outlook  is  therefore  distinctly  encouraging  that  a  more  useful 
basis  of  facts  and  inferences  will  become  available  in  the  near  future 
and  that  the  question  will  be  decided  one  way  or  the  other  to  the  best 
interests  of  the  people  concerned. 

As  a  fundamental  principle  of  procedure,  the  new  commissions  of 
inquiry  have  clearly  recognized  the  urgency  of  utilizing  the  existing 
state  machinery  for  the  ascertainment  of  the  facts  rather  than  the 
employment  of  high-priced  experts  or  specialists  from  other  States. 
Since  in  its  final  analysis  compulsory  health  insurance  is  primarily 
concerned   with   the  present  health   condition   of   the  people,   their 


economic  .sl;itus,  lluir  inctliods  of  relief,  their  forms  of  insurance  and 
voluntary  protection,  etc.,  it  is  self-evident  that  the  most  useful  assis- 
tance can  be  rendered,  and  as  a  matter  of  state  policy  ought  to  be 
rendered  by  the  state  health  departments,  state  insurance  departments, 
slate  departments  of  charities  and  relief,  of  labor  and  industry,  etc.  In 
addition  thereto  invaluable  aid  should  be  forthcoming  from  organized 
labor,  organized  industry,  and  the  medical  profession,  whether  organ- 
ized or  not;  for  ui)on  many  medical  and  related  questions  the  individual 
judgment  of  physicians  of  large  experience  will  be  as  conclusive  and 
useful  as  the  collective  evidence  secured  through  an  associated  effort  by 
means  of  a  (jueslionnaire,  etc.  To  the  extent  that  the  available  state 
machinery  of  ofl'icial  inquiry  is  utilized  by  the  state  commissions  on 
social  insurance  now  in  existence  the  outlook  is  distinctly  improved 
that  the  work  of  these  commissions  will  contribute  materially  to  the 
enlightenment  of  the  public  upon  a  large  variety  of  questions  of  public 
health  and  welfare,  irrespective  of  their  immediate  relation  to  the 
proposal  for  the  establishment  of  compulsory  health  insurance  on  the 
part  of  the  several  vStates. 


10 


FIRST  REPORT  OF  THE  SOCIAL  INSURANCE 
COMMISSION   OF  CALIFORNIA,  JANUARY,    1917 

The  report  of  the  Social  Insurance  Commission  of  the  State  of  Cali- 
fornia was  transmitted  to  the  legislature  under  date  of  January  25, 
1917.  Following  a  brief  historical  account,  the  report  presents,  first, 
the  findings  and  recommendations  of  the  commission,  amplified  by 
a  brief  survey  of  the  social  and  economic  condition  of  California  wage- 
earners,  with  special  reference  to  health  and  medical  attendance  and 
a  more  general  survey  or  review  of  social  insurance  in  foreign  coun- 
tries, the  social  results  of  social  insurance,  the  existing  facilities  for  the 
insurance  of  wageworkers  in  the  United  States,  the  social  insurance 
movement  in  the  United  States  and,  finally,  some  estimates  of  cost, 
the  probable  rate  of  sickness,  etc.  It  is  not  made  clear  that  there  was 
at  the  time  a  well-defined  public  demand  for  such  an  investigation,  it 
being  merely  intimated  in  the  introduction  that  "In  the  spring  of  1915, 
insistent  problems  of  dependency  and  destitution  were  called  to  the 
attention  of  the  California  legislature,"  and  it  is  pointed  out  that 
destitution  was  a  growing  social  disease,  that  public  relief  was  at  best 
an  undemocratic  palliative,  and  that  demands  for  assistance  were 
increasing  at  such  an  alarming  rate  as  to  become  an  intolerable  burden 
upon  public  funds.  If  such  deplorable  conditions  really  existed,  the 
report  of  the  Social  Insurance  Commission  fails  completely  in  present- 
ing a  conclusive  statement  of  the  facts. 

The  work  of  the  commission,  on  the  unanimous  advice  of  "the 
Eastern  men  and  women  who  had  carefully  studied  social-insurance 
problems,"  was  concentrated  upon  health  insurance.  A  "survey" 
was  made,  therefore,  of  the  various  systems  of  social  insurance  at 
present  in  operation  in  different  foreign  countries  involving  a  special 
study  of  compulsory  and  voluntary  subsidized  health-insurance 
systems  in  fourteen  European  countries,  of  the  evidence  as  to  the 
general  effect  of  social  insurance  upon  the  economic  status  of  wage- 
workers  in  Europe,  of  facilities  available  for  the  insurance  of  wovking- 
men  in  the  United  States,  of  conditions  of  employment  in  California 
(such  as  average  wages,  unemployment  and  the  health  conditions  of 
several  industrial  communities),  of  the  cost  of  medical  aid  and  hospi- 
tal care  in  relation  to  the  earning  capacity  of  the  average  wageworker, 
of  the  existing  facilities  for  the  public  care  of  the  indigent  sick  in 
California    (such   as   available   free   hospital   space,    and   out-patient 


clinics),  ol"  tlu-  probUiii  of  poverty  and  destitution  in  California 
(especially  in  their  connection  with  sickness),  and,  finally,  of  the 
present  extent  of  voluntary  health  insurance  in  California  through 
fraternal  orders,  trade-unions  and  commercial  insurance  companies. 

vSucli  a  formidable  program  necessarily  required  for  its  successful 
attainment  a  considerable  staff  of  qualified  investigators,  large 
funds  for  special  research,  directing  capacity  of  a  high  order  and  an 
absolutelv  impartial  sense  of  judicial  fairness  in  the  adjudication  of 
tlie  facts  and  information  collected.  The  report  fails  conspicuously 
to  present  evidence  that  even  a  single  one  of  the  numerous  subdi- 
visions of  the  program  outlined  received  qualified  and  sufficiently  ex- 
tended consideration.  Most  of  the  so-called  evidence  presented  is 
merely  a  restatement  of  data  and  conclusions  derived  from  preexisting 
sources.  It  does  not  require  a  state  commission  to  review  the  facts 
or  lindings  of  previous  investigations  conveniently  accessible  through 
the  reports  of  the  United  States  Bureau  of  Labor  Statistics,  etc. 
Merely  to  reaffirm  the  conclusions  of  others,  whether  qualified  or  not 
to  make  an  investigation  of  the  compulsory  and  subsidized  health- 
insurance  systems  of  fourteen  European  countries,  is  certainly  not 
"a  special  study"  in  the  accepted  sense  of  the  term.  Nor  is  a  mere 
restatement  of  the  data  derived  almost  exclusively  from  foreign 
official  sources  "evidence,"  or  to  be  construed  as  such,  regarding  "the 
general  effect  of  social  insurance  upon  the  economic  status  of  wage- 
workers  in  Europe."  As  regards  the  operations  of  European  social- 
insurance  systems,  the  report  of  the  California  Social  Insurance 
Commission  merely  presents  conclusions  inadmissible  as  the  impartial 
findings  of  a  body  of  experts  appointed  by  the  State  for  the  purpose  of 
an  original  investigation,  with  a  due  regard  to  all  the  interests  concerned 
and  not  merely  to  the  prejudiced  viewpoint  of  "Eastern  men  and 
women"  whose  judgment,  in  the  main,  seems  to  have  guided  the  com- 
mission in  its  work. 

On  the  basis  of  a  thoroughly  superficial  and  quite  inconclusive 
investigation  of  foreign  social-insurance  systems,  the  commission 
concludes  that  "While  no  country  in  the  world  has  as  yet  succeeded 
in  abolishing  poverty,  or  even  destitution,  and  the  need  for  charitable 
relief,  much  has  been  accomplished  towards  that  goal  in  several  coun- 
tries by  means  of  the  existing  social-insurance  systems."  No  con- 
clusive evidence  has  been  forthcoming  that  social  insurance  has  really 
been  the  cause  of  a  diminution  in  poor-relief.  The  evidence  is  that 
there  has  rather  been  a  subtle  alteration  in  the  methods  of  such  relief. 
For  illustration,  in  England,  old-age  poor-relief  in  the  strict  sense  of 
the  term  is  now  called  an  old-age  pension,  paid  for  not  out  of  the  con- 

12 


tributions  or  savings  of  wage-earners,  but  entirely  and  exclusively 
out  of  the  direct  taxation  of  the  public,  and  much  in  the  same  manner 
as  was  previously  the  case  with  poor-relief  in  old  age.  All  the  in- 
vestigations which  have  been  made  in  Germany  have  been  inconclu- 
sive as  to  the  question  whether  social  insurance,  in  any  or  all  its  forms, 
has  really  been  the  direct  cause  of  a  material  or  measurable  improve- 
ment in  the  social  and  economic  condition  of  the  people  concerned.* 

This  conclusion  applies  particularly  to  the  alleged  influence  of 
social  insurance,  and  especially  sickness  insurance,  on  the  health  and 
mortality  rates  of  wage-earners  and  their  families.  The  California 
commission  is  not  justified  in  its  conclusion,  with  regard  to  which  it 
brings  forward  no  convincing  evidence,  that  "social  insurance  has 
proved  to  be  a  powerful  factor  for  the  preservation  of  life  and  health, 
through  the  'safety-first'  movement,  through  improved  care  of  the 
sick  and  invalids  and  through  regularization  of  employment."  There 
has  been  no  such  "safety-first"  movement  in  foreign  countries  as  has 
been  developed  in  the  United  States,  based  purely  on  voluntary  effort 
and  the  active  and  intelligent  co-operation  of  both  employers  and 
employees.  It,  of  course,  may  be  argued  that  the  safety-first  move- 
ment in  this  country  has  for  its  background  the  comparatively  recent 
workmen's  compensation  legislation,  and  to  a  certain  extent  this  no 
doubt  is  true,  but  it  is  a  quite  erroneous  assumption  to  apply  the  term 
"social  insurance"  to  workmen's  compensation  legislation,  in  which 
the  insurance  factor  is,  broadly  speaking,  of  quite  secondary  impor- 
tance, and,  with  the  exception  of  a  few  States,  provided  for  entirely 
through  private  enterprise. 

Equally  misleading  is  the  conclusion  advanced  by  the  California 
commission  that  "In  several  countries  the  increased  span  of  life  and 
improved  health  conditions  are  largely  ascribed  to  the  influence  of 
social  insurance."  Any  one,  of  course,  may  ascribe  such  changes 
in  longevity  to  social  insurance,  but  the  question  is  one  of  fact  and 
correct  inference  and  not  of  partisan  guesswork  opinion.  In  very 
truth,  and  as   elsewhere  conclusively  shown,  f  the  improvement  in 

♦"Poverty  has  not  been  abolished  in  Germany.      Industrial  depression  takes  its  tribute  there  jus 

as  it  does  with  us It  is.  of  course,  difficult  to  measure  the  eflfect  of  this  legislation  o  j. 

to  make  accurate  comparisons  of  labor  conditions  in  different  countries.  There  are  so  many  element  g 
involved.  And  it  is  hard  to  portray  the  exact  conditions  of  the  working  classes.  The  German  arti- 
san works  long  hours  at  exhausting  labor;  his  wages  are  low  in  comparison  with  those  which  prevail 
in  America;  housing  conditions  are  very  bad,  not  only  in  the  city  but  in  the  country,  and  the  worker 
is  far  from  enjoying  the  freedom  of  action  or  the  hopeful  outlook  of  this  country.  Poverty  of  the 
most  dbtressing  kind  still  prevails,  the  life  of  the  people  is  in  many  ways  poor  and  sordid,  the  unrest 
of  the  workers  and  their  political  demands  are  all  justified  byconditions.  It  would  be  false  to  suggest 
that  Germany  has  made  any  revolutionary  changes  in  these  matters  or  aimed  at  a  programme  of  indus- 
trial justice  or  political  equality." — See  Socialized  Germany,  p.  202.  By  Frederic  C.  Howe,  LL.D., 
New  York,  1917. 

tSee  "Facts  and  Fallacies  of  Compulsory  Health  Insurance,"  by  Frederick  L.  Hoffman,  Prudential 
Press.  1917. 

13 


longevity  has  biiii  more  proiioimccd  in  this  country  than  in  continental 
Ivuropf,  and  the  jjrcscnt  lioalth  conditions  of  our  people  without  social 
insurance  are  decidedly  superior  to  those  which  prevail  in  the  countries 
in  which  social  insurance  previously  to  the  war  had  attained  to  its 
hiKlu'st  degree  of  intensive  development.  Improvements  in  health 
conditions  are  largely  in  consequence  of  rational  sanitary  measures 
primarily  conditioned  by  the  modern  knowledge  of  the  true  nature 
and  causes  of  the  spread  of  infectious  diseases.  No  health-insur- 
ance system  is  required  to  improve  the  health  administration  of  a 
nation,  State  or  locality,  but,  quite  to  the  contrary,  by  offering  strong 
pecimiary  inducements  to  the  exaggeration  of  the  importance  of  minor 
ailments  or  the  undue  prolongation  of  the  period  of  convalescence, 
compulsory  health  insurance  is  much  more  likely  to  hinder  health 
progress  than  to  help  it,  and  that,  in  any  event,  has  in  a  measurable 
degree  been  the  case  in  the  countries  in  which  social  insurance  had 
its  inception  and  in  which,  for  reasons  of  state,  it  has  been  raised  to 
the  dignity  of  a  new  branch  of  government. 

Having  previously  made  no  thorough  investigation  of  social-insur- 
ance methods  and  results  in  foreign  countries,  the  report  of  the  com- 
mission quite  seriously  misstates  the  facts,  when  it  is  said  that  "After 
investigation  of  conditions  throughout  the  United  States  the  com- 
mission further  finds  that,"  etc.  The  commission  made  no  investiga- 
tion of  labor  and  health  conditions  throughout  the  United  States,  but 
merely  accepted  such  findings  as  were  available  through  printed 
sources,  made  subject  to  the  foreign  bias  of  its  chief  investigator  and 
more  or  less  deliberately  misconstrued  for  preconceived  ends  and  pur- 
poses. Thus,  for  illustration,  the  "finding"  of  the  commission  that 
"There  has  been  a  decided  change  in  the  attitude  of  American  students 
of  economic  and  sociological  problems  towards  social-insurance 
methods,  so  that  instead  of  the  general  opposition  of  ten  years  ago  the 
commission  finds  among  them  at  present  an  almost  unanimous  support 
of  the  compulsory  social-insurance  method  of  coping  with  the  problem 
of  destitution  in  this  country,"  and  that  "Of  the  experts  on  economic 
and  social  problems  consulted  the  majority  agreed  that  health  insur- 
ance is  the  particular  branch  of  social  insurance  which  can  and  should 
be  developed  next  in  this  country,"  and,  finally,  that  "on  the  basis 
of  statistical  information  gathered  in  its  California  investigation  toward 
which  the  greatest  part  of  the  efforts  of  the  commission  were  directed," 
certain  conclusions  as  to  the  social  and  economic  condition  of  Califor- 
nia wage-earners  are  arrived  at,  which  may  or  may  not,  according  to 
the  point  of  view,  justify  the  ultimate  recommendations  of  the  com- 
mission, subsequently  to  be  reviewed.     It  is  not  true,  as  stated  by  the 

14 


commission,  that  there  has  been  a  decided  change  in  the  view- 
point of  American  experts  in  sociology  or  economics,  for  neither  has 
the  American  Sociological  Society  nor  the  American  Economic  Asso- 
ciation ever  concerned  itself  seriously  and  exhaustively  with  this  ques- 
tion, nor  has  either  ever  given  public  expression  to  its  views  on  the 
subject,  one  way  or  the  other.  It  may  safely  be  asserted  that  experts, 
with  few  exceptions  students  of  sociology  and  economics,  in  this 
country  are  as  indifferent  to  the  technical  and  qualified  consideration 
of  social-insurance  problems  at  the  present  time  as  they  were  ten  years 
ago.  The  opinion  of  the  few  who  have  spoken  or  written  on  social 
insurance  cannot  rightfully  be  construed  as  the  conviction  of  the  vast 
majority  of  men  and  women  earnestly  concerned  with  problems  of 
economics  and  social  policy  in  this  country  at  the  present  time. 

The  commission  maintains  among  its  several  conclusions  that 
"the  earning  power  of  the  majority  of  the  wageworkers  is  not  suffi- 
ciently high  to  enable  them  to  go  through  an  attack  of  serious  illness 
without  a  very  grave  hazard  to  their  economic  well-being."  This 
statement  is  so  adroitly  phrased  as  to  admit  of  no  categorical  answer 
whatever.  Theoretically ,  of  course,  almost  any  workman,  even  in  well-to- 
do  circumstances,  may  find  himself  confronted  by  the  pecuniary  con- 
sequences of  a  prolonged  state  of  illness  destructive  of  his  earning  I 
capacity,  or,  on  the  other  hand,  because  of  prolonged  illness  in  his 
family  his  savings  may  be  exhausted,  the  instalment  on  his  mortgage 
may  be  unpaid  and  his  other  financial  obligations  may  fall  into  arrears, 
etc.  The  law-making  power  of  a  government  is  not  concerned  with 
exceptional  instances  of  either  social  misconduct  or  social  distress. 
The  relief  of  such  cases  ever  has  been  and  ever  will  remain  a  matter  of 
personal  concern,  of  alleviation  through  private  purses,  or,  in  its  last 
resort,  a  matter  of  public  charity.  It  is  not  true,  however,  that  the 
problem  of  exceptional  distress  in  consequence  of  prolonged  sickness 
is  one  of  serious  concern  either  to  the  "majority"  of  wageworkers  in 
California  or  to  the  wageworkers  in  any  other  section  of  the  United  _ 
States. 

The  "facts"  collected  by  the  commission  itself,  and  those  pre- 
sented for  the  State  of  California,  justify  the  conclusion  that  serious 
illness,  or  illness  of  prolonged  duration,  is  rare  among  California  wage- 
workers,  and  that  the  average  incidence  of  sickness  is  decidedly  less 
than  in  other  sections  of  the  country.  Since  industrially  San  Francisco 
and  Oakland  are  naturally  of  predominating  importance,  it  is  of  ex- 
ceptional interest  to  find  that,  according  to  the  commission's  own 
investigation,  during  the  year  1915  among  some  1,200  workmen  in 
various  establishments  of  the  Bay  Cities  the  average  loss  of  working- 

15 


time  on  account  of  sickness  was  only  2.9  working-days  per  man  per 
annum.  Heretofore  it  has  generally  been  alleged  that  the  average 
amount  of  time  lost  on  account  of  sickness  in  this  country  was  from 
seven  to  nine  days.  Here  is  the  evidence  presented  by  the  California 
commission  (and  it  may  be  presumed  that  they  were  not  seeking  for  an 
exceptionally  prosperous  or  well-situated  group  of  wageworkers) ,  that 
the  average  amount  of  sickness  in  a  given  group  was  only  about  three 
days  per  man  per  annum  in  the  section  under  review.  Yet  confronted 
by  facts  which  to  an  impartial  investigator  would  have  been  conclusive 
evidence  of  the  superior  health  conditions  of  California  wage-earners 
or  at  least  of  those  employed  in  the  Bay  Cities,  or,  strictly  speaking,  of 
the  comparatively  small  but  representative  group  of  men  under  review, 
who  as  regards  health  were  decidedly  above  the  average,  the  commis- 
sion advanced  the  vague  explanation  that  considered  in  detail  the 
"distribution  of  the  days  of  illness  gives  the  real  picture  of  the 
hardship  to  the  individuals  who  fell  sick."  For,  they  point  out, 
"Almost  one-fourth  of  the  total  days  of  sickness  were  lost  by  ten 
men.  One  man  lost  almost  a  half-year's  earnings  because  of  sickness. 
Two  others  were  incapacitated  for  more  than  nine  weeks."  In  other 
words,  the  previous  allegation  as  to  the  insufficiency  of  the  earning 
power  of  the  majority  of  the  wageworkers  in  the  event  of  prolonged 
sickness  is  apparently  based  upon  a  single  case,  in  which  a  man  lost 
almost  half  of  a  year's  earnings  because  of  a  case  of  sickness  of  ex- 
ceptional severity! 

Among  other  conclusions,  the  argument  is  advanced  by  the  com- 
mission that  "the  loss  of  earnings  through  unemployment  is  very 
large,  thus  materially  afifecting  the  annual  income."  Much  of  such  a 
loss  of  earnings  is  entirely  voluntary  and  a  matter  of  choice  to  the 
workman  concerned.  Some,  if  not  much,  of  it  is  unavoidable  and  no 
doubt  a  serious  hardship  in  individual  cases  where  a  loss  of  earnings 
has  not  been  provided  for  by  previous  savings.  The  problem  of  un- 
employment, however,  is  entirely  separate  and  distinct  from  the  prob- 
lem of  health  insurance,  except  in  so  far  that  all  European  experience  is 
absolutely  conclusive  that  the  alleged  sickness  rate  rises  invariably  and 
almost  in  exact  proportion  to  the  number  unemployed  during  periods 
of  more  or  less  prolonged  unemployment.  In  other  words,  a  rise  in  the 
curve  of  unemployment  is  almost  invariably  followed  by  a  corresponding 
rise  in  the  curve  of  alleged  sickness.  The  experience  of  the  Leipzig  Com- 
munal Sick  Fund,  which  is  typical  of  institutions  of  this  kind,  proved 
quite  conclusively  that  the  unemployed  take  advantage  of  the  facilities 
of  drawing  financial  support  from  the  sick  funds  for  some  alleged  illness 
or  other,  usually  one  difficult  of  precise  diagnosis  or  immediate  detection. 

16 


It  may  here  be  said  that  the  enormous  extent  of  malingering  in  Ger- 
many especially  is  very  inadequately  realized  in  this  country  and  in- 
variably made  light  of  by  those  who,  for  some  years  past,  have  been 
so  industrially  engaged  in  promoting  the  propaganda  for  social  insur- 
ance on  German  principles  in  this  country.*  In  the  Leipzig  Communal 
Sick  Fund  the  evil  of  malingering  reached  such  alarming  proportions 
some  years  ago  that  special  investigators  or  home  visitors  were  em- 
ployed for  the  purpose  of  ascertaining  the  true  condition  of  the 
patients.  During  1914,  when  the  affairs  of  the  fund  were  but  slightly 
affected  by  the  war,  out  of  10,447  patients  in  receipt  of  pecuniary  sup- 
port on  account  of  their  alleged  incapacity,  5,542,  or  53  per  cent.,  were 
easily  ascertained  to  be  fully  qualified  to  return  to  work,  and  571,  or  5.5 
per  cent,  additional,  were  found  to  be  in  a  condition  in  which  they  were 
capable  of  returning  to  work,  and  were  ordered  to  do  so  within  the 
current  week  for  which  support  was  being  paid.  Of  the  remainder,  1 ,008 
or  9.7  per  cent,  were  required  to  have  themselves  reexamined  within  a 
week  or  two,  and  only  3,326,  or  3 1 .8  per  cent.,  were  officially  certified  to 
as  being  unable  to  work  and  entitled  to  support  and  care  in  the  strict 
sense  of  the  term.  Since  practically  all  German  sickness-insurance 
figures  are  invalidated  by  this  excessive  amount  of  malingering,  the 
average  duration  of  wage-earners'  sickness  in  that  country,  or  the 
average  number  of  days'  sickness  per  annum,  is  invariably  found  to  be 
materially  in  excess  of  the  normal  amount  of  wage -earners'  sickness 
ascertained  to  prevail  in  this  country  by  impartial  and  trustworthy 
means. 

In  taking  up  the  question  of  the  cost  of  sickness  in  California  and 
elsewhere  on  the  Pacific  Coast,  the  commission  maintains  that  the 
expenses  are  "considerably  heavier  than  in  other  parts  of  the  country." 
This,  of  course,  in  a  measure  is  due  to  the  fact  that  both  wages  and 
the  cost  of  living  are  higher  in  that  section  of  the  country. f  In  support 
of  that  view,  a  comparison  of  the  standards  of  payment  for  medical 
services  with  the  incomes  of  a  large  proportion  of  the  wageworkers 
leads  to  the  conclusion  that  the  charges,  at  the  ordinary  rates  of  pay- 
ment, are  not  beyond  the  means  of  a  large  number  of  wageworkers, 
and  the  commission  includes  in  the  text  of  its  report  a  schedule  of 

♦See  "The  Failure  of  the  German  System  of  Compulsory  Health  Insurance,"  by  Frederick  L. 
Hoffman,  Prudential  Press.  1918. 

tThe  following  statement  in  Fenner's  Southern  Medical  Reports,  Volume  II.  1850,  page  461,  is 
from  the  editorial  introduction  to  Dr.  Logan's  Report  on  the  Topography,  Climate  and  Diseases  of 
California : 

"Dr.  Logan  gives  a  specimen  of  the  fee-hill  adopted  by  the  Medical  Society  of  San  Francisco, 
which  displays  the  most  exorbitant  charges  probably  ever  exacted  in  any  country;  varying  from  thirty- 
two  dollars  for  a  single  visit,  up  to  one  thousand  dollars  for  the  operation  for  cataract,  or  trephining. 
Surely  nothing  but  a  community  of  nabobs  inhabiting  a  region  of  gold  could  support  such  charges;  and 
how  strange  to  think,  that  whilst  one  portion  of  the  profession  is  obtaining  such  prices  for  their  services, 
another,  perhaps,  not  less  competent,  are  to  be  seen  working  on  the  streets  for  a  living." 

17 


minimum  medical  fees  adopted  by  the  San  Francisco  County  Medical 
vSociety  under  date  of  March  8,  1898,  and  the  schedule  adopted  by  the 
Los  An^'cles  County  Medical  Association  under  date  of  April  14,  1910. 
The  inference  drawn  from  these  schedules  is  grotesquely  erroneous, 
for.  as  the  commission  could  have  learned  by  casual  inquiry  of  any  one 
familiar  with  the  fact,  the  minimum  medical  fee  for  one  ordinary  visit, 
stated  to  be  "not  less  than  $5,"  is  practically  never  charged  in 
ordinary  medical  cases  by  any  practitioner  in  the  city  of  vSan  Francisco 
or  its  vicinity.  It  is  true  that  the  schedule  of  fees  might  have  justified 
such  a  conclusion,  but  the  schedule  was  adopted  for  legal  defense 
purposes  rather  than  for  enforcement  in  the  every-day  practise  of  San 
Francisco  physicians.  According  to  the  Los  Angeles  schedule,  the 
minimum  fee  is  given  as  only  $2,  and  the  maximum  fee  as  $5,  for 
advice  and  treatment  in  ordinary  cases.  And  this  principle  of  a  $2 
fee  was  also  incorporated  into  the  schedule  of  the  State  Compensation 
Insurance  Fund.  There  is  nothing  to  indicate  in  the  readily  ascer- 
tainable facts  of  medical  practise  in  the  State  of  California  that  the 
fees  actually  charged  are  exorbitant  or  out  of  proportion  to  the  earning 
capacity  of  California  wageworkers.  Of  course,  exceptions  are  met 
with,  and  cases  of  extortion  on  the  part  of  unscrupulous  medical 
practitioners  are  probably  not  less  common  in  California  than  in  other 
States. 

On  very  fragmentary  information,  limited  to  some  600  individual 
working-women  in  San  Francisco  and  Los  Angeles,  the  further  conclu- 
sion was  arrived  at  that  "the  percentage  of  income  expended  for 
medical  and  dental  care  was  about  4  per  cent."  In  this  case,  again, 
overemphasis  is  placed  upon  the  exceptionally  heavy  expenditures 
incurred  by  a  few  of  the  individuals,  for  it  is  pointed  out  that  more 
than  90  per  cent,  of  the  total  amount  expended  by  the  entire  group  for 
medical  care  "was  paid  out  by  21  of  their  number,  while  301,  or  over 
50  per  cent,  (of  the  600),  suffered  no  expense  whatever.  Of  the  four 
women  incurring  medical  bills  of  more  than  $300.  only  one  had  an 
earning  capacity  of  more  than  $12  a  week.  The  remaining  three  were 
earning  from  six  to  twelve  dollars  a  week;  and  eight  of  the  seventeen 
who  paid  between  $100  and  $300  for  medical  assistance  received  less 
than  $1 2  a  week."  The  evidence  of  the  commission  itself  is,  therefore, 
conclusive  that  even  women  earning  less  than  $1 2  a  week  were  receiving 
adequate  medical  care  regardless  of  the  practical  certainty  that  they 
would  not  be  able  to  pay  the  full  amounts  charged  them.  But  to 
argue  in  favor  of  an  elaborate,  costly  and  burdensome  system  of  social 
insurance  for  all  the  working  people  of  a  State  because  of  the  excep- 
tional necessities  of  the  very  few  is  clearly  a  reversion  of  the  ordinary 

18 


procedure  in  matters  of  every-day  business,  government  and  domestic 
life.  The  more  adequate  and  even  liberal  medical  care  of  the  deserving 
few  among  the  comparatively  poor  or  the  moderately  well-to-do  can 
be  much  more  cheaply  and  efficiently  provided  for  by  other  means 
than  through  the  establishment  of  a  colossal  and  typically  German 
bureaucratic  government  organization,  resting  ostensibly,  though 
certainly  not  in  fact,  upon  recognized  principles  of  insurance  or  the 
law  of  general  average  and  contributionship. 

A  similar  experience  is  presented  in  the  evidence  of  the  commission 
concerning  251  laundresses,  who  during  the  year  paid  out  in  the  aggre- 
gate 5.1  per  cent,  of  their  earnings  for  medical  and  dental  care,  in- 
cluding drugs  and  hospital  treatment.  But  almost  one-half  of  the  sum 
expended  ($5,738),  -or  $2,291,  was  paid  by  eleven  women,  only  one 
of  whom  had  an  earning  capacity  of  over  $12  a  week.  Here  again  the 
evidence  is  quite  convincing  that,  though  in  a  condition  of  relative 
poverty,  the  women  under  consideration  were  able  to  obtain  the  re- 
quired medical  attendance,  etc.,  though  obviously  far  beyond  their 
available  means. 

It  is  readily  conceded  by  the  commission  that,  almost  without  ex- 
ception, the  illness  in  a  given  group  affected  relatively  only  a  very 
small  proportion.  This,  of  course,  is  entirely  in  conformity  to  the 
facts  of  every-day  experience,  and  since  good  health  and  the  avoidance 
of  sickness  are,  in  a  large  measure,  personal  questions,  the  basis  of 
insurance  against  sickness  rests  upon  fundamentally  different  ethical 
grounds  than  life  insurance  against  the  contingencies  of  death.  The 
latter  is  a  certain  event  of  uncertain  occurrence,  whereas  the  former  is 
a  probability,  and  to  an  increasing  extent,  in  the  majority  of  cases,  a 
remote  possibility.  Even  in  the  groups  of  wage-earners  investigated 
by  the  California  commission,  representative  of  an  element  living  at 
more  or  less  decided  social  and  economical  disadvantages,  the  large 
majority  experienced  no  sick  losses  whatever  during  the  year.  If, 
because  of  right  conduct  or  because  of  conformity  to  recognized 
principles  of  personal  and  public  hygiene,  the  majority  of  a  given  group 
are  as  a  matter  of  practical  certainty  removed  from  the  risk  of 
sickness,  is  it  a  rational  method  of  governmental  procedure  to  insist 
upon  uniform  and  life-long  contributions  from  this  group  for  the 
benefit  of  the  indifferent,  the  reckless  or  the  careless,  as  the  case  may 
be?  Is  it  in  conformity  to  our  conceptions  of  a  democratic  form  of 
government  that  a  costly,  burdensome  and  arbitrary  system  of  so- 
called  compulsory  health  insurance  must  be  brought  into  existence 
solely  for  the  purpose  of  providing  more  liberal  support  in  sickness, 
and  better  medical  care  for  the  few  whose  social  and  economic  status 

19 


will  rciiiaiii  unchanged,  if  not  made  even  worse,  in  consequence  of  the 
certainty  of  ituHfTcrence  to  or  neglect  of  agencies  or  methods  which 
liave  heretofore  proved  adequate  for  the  care  of  the  poor  in  sickness 
or  distress? 

In  brief,  the  California  commission  did  not  find,  regardless  of  a 
painstaking  efTort,  the  amount  of  sickness  alleged  to  exist,  and  it  did 
not  establish  the  social  or  economic  necessity  for  compulsory  health 
insurance  by  reference  to  a  few  cases  proving  conclusively  an  excep- 
tion to  the  rule  of  general  social  and  economic  well-being  on  the  part 
of  the  vast  majority  of  the  wageworkers  of  the  State. 

When  freed  from  the  confusion  arising  out  of  purely  speculative 
considerations  of  social  insurance,  the  problem  of  prompt,  adequate 
and  efficient  medical  attendance,  in  the  broadest  conception  of  the 
term,  is  unquestionably  of  the  first  importance  to  the  people,  not 
only  of  the  State  of  California  but  of  the  United  States  at  large. 
Some  of  the  information  presented  by  the  commission  on  the  subject  of 
the  free  clinic  or  dispensary  system  of  California  is  deserving  of  most 
thoughtful  consideration.  The  tendency  is  unquestionably  towards 
a  substantial  increase  in  the  public  treatment  of  medical  patients, 
both  in  hospitals  and  in  dispensaries  rather  than  in  the  office  of  the 
physician  or  in  the  home.  Concentration  of  effort  must  certainly 
produce  far-reaching  medical  economies  and  a  decided  improvement 
in  the  results  of  treatment  and  after-care.  There  is  something 
essentially  democratic  and  humane  in  charity  practise  in  medicine 
or  surgery,  where  the  medical  or  surgical  needs  of  the  individual  are 
paramount,  because  of  the  need  of  life  and  health  conservation, 
irrespective  of  his  or  her  economic  status,  or,  in  other  words, 
the  ability  to  pay  for  such  services  proportionately  to  their  worth. 
First-class  medical  and  first-class  dental  care  involve,  unfortunately 
too  often,  an  expenditure  far  beyond  the  means  of  the  normal 
income,  as  best  illustrated  in  the  case  of  modern  radiological 
diagnoses  in  lung  diseases,  on  the  one  hand,  and  the  expense  of 
first-class  dental  treatment,  on  the  other.  The  burden  in  such  cases 
falls  as  heavily  upon  the  moderately  well-to-do,  if  not  even  more 
so,  as  upon  the  poor.  It  has  well  been  said  that  really  first-class 
medical  and  surgical  treatment  is  available  only  to  the  very  poor 
and  the  very  rich.  Unquestionably,  radical  changes  in  private 
medical  practise  will  be  required  to  establish  medical  treatment  for  the 
mass  of  the  population  upon  more  rational  principles  than  those 
followed  at  the  present  time.  The  larger  problem  of  state  medicine 
lies  somewhat  outside  of  the  present  discussion.  The  effective  re- 
organization  of   the  entire   medical  profession,   however,   has   been 

20 


brought  measurably  nearer  to  a  conclusion  in  consequence  of  the  war. 
There  are  no  reasons  why  the  immediate  medical  needs  of  the  men  on 
the  battlefield  should  be  made  subject  to  different  methods  or  forms  of 
medical  administration  than  the  needs  of  the  entire  population,  or  at 
least  of  the  industrial  element  in  times  of  peace.  Measurable  progress 
has  been  made  in  this  direction,  and  many  far-reaching  reforms  have 
been  achieved.  As  an  alternative  to  compulsory  health  insurance,  a 
rational  system  of  state  medicine,  in  the  broader  sense  of  the  term, 
would  provide  a  decidedly  more  satisfactory  solution.  It  certainly 
has  been  the  experience  in  the  army  and  the  navy  that  a  satisfactory 
class  of  physicians,  surgeons,  dentists,  eye-specialists,  etc.,  can  be  had 
on  a  salary  basis,  regardless  of  the  fact  that  the  average  compensation 
allowed  has  been  thought  below  what  would  be  considered  a  reasonable 
standard  for  successful  physicians  engaged  in  private  practise.  To 
confuse  the  medical  requirements  of  the  people  with  more  or  less 
involved  and  often  highly  speculative  insurance  considerations  is  to 
point  to  the  failure  of  a  given  health-insurance  measure  rather  than 
to  its  successful  achievement  in  the  vast  field  of  social  reform. 

But  it  is  easy  to  overrate  the  importance  of  sickness  in  the  every- 
day life  of  the  wage-earner  and  his  family.  It  is  not  going  too  far  to 
maintain  that  infinitely  better  results  would  be  secured  by  concen- 
trating the  public  interest,  collectively  and  individually,  upon  the 
far-reaching  possibility  of  preventive  medicine  rather  than  by  arousing 
faith  in  the  efficacy  of  an  institution  which,  at  best,  has  failed  to  ineet 
the  reasonable  expectations  of  all  those  most  thoroughly  familiar  with 
the  facts.  It  is  misleading  on  the  part  of  the  California  commission  to 
assert  that  "illness  is  the  most  frequently  occurring  cause  for  seeking 
charitable  relief."  Of  course,  illness  is  the  most  successful  means  of 
securing  charitable  assistance,  whether  the  claim  put  forward  is  justi- 
fied or  not.  No  collective  investigation  of  the  true  causes  of  poverty 
has  ever  been  made  in  this  country,  and  the  available  evidence  from  a 
large  variety  of  sources  is  quite  conflicting.*  In  the  experience  of  some 
relief  societies  the  principal  cause  has  been  drink;  in  others,  unemploy- 
ment; in  still  others,  desertion,  etc.  Even  granting,  however,  that 
sickness  as  a  cause  of  economic  dependence  is  of  overshadowing  im- 
portance, the  problem  is  not  met  by  relief,  but  by  prevention.  There 
is  no  evidence  extant  that  a  single  sickness-insurance  fund  in  one  of 
the  continental  European  countries  has  concerned  itself  actively  and 
progressively  wnth  the  problems  of  local  health  or  disease  prevention 
and  control.     No  evidence  has  been  forthcoming,  regardless  of  all 


*Of  exceptional  Talue  is  a  recent  report  on  "Poverty  in  Baltimore  and  Its  Causes,"  issued  by  The 
Alliance  of  Charitable  and  Social  Agencies,  Baltimore,  Md..  1918. 

21 


assertions  to  the  contrary,  that  a  single  so-called  health-insurance 
bill  thus  far  introduced  would  provide  effectively  for  the  improvement 
of  the  public  health.  In  fact,  there  are  the  strongest  reasons  for  be- 
lieving that  the  establishment  of  another  governmental  authority 
interested  or  concerned  with  matters  of  health,  sanitation,  disease 
control,  etc.,  would  merely  add  to  the  existing  confusion  and  bring 
about  a  lowering  of  the  health  status  of  our  American  communities, 
which  has  been  attained  in  consequence  of  many  years  of  indefatigable 
efforts  on  the  part  of  the  sanitary  authorities  and  the  auxiliary  volun- 
tary health  activities  related  thereto. 

The  commission  properly  draws  attention  to  deserving  cases  of 
pregnancy  and  tuberculosis  insufficiently  provided  for  under  the  ex- 
isting conditions.  Under  a  rational  system  of  state  medical  care  the 
public  control  of  maternity  cases  would  necessarily  be  a  matter  of 
special  concern.  There  is  nothing  more  deplorable  than  the  neglect 
of  women  in  pregnancy,  but  frequently  such  neglect  is  attributable  to 
false  notions  of  self-pride  or  to  complete  ignorance  of  the  foreign-born 
regarding  the  public  facilities  available  to  those  most  urgently  in 
need.  Commendable  progress  has  been  made  in  the  scientific  study  of 
the  subject  of  maternity,  the  after-care  of  mothers  and  even  prenatal 
care,  as  well  as  the  supremely  important  problem  of  health  in  early 
infancy.  The  conservation  of  childhood  today  is  a  clearly  recognized 
community  responsibility,  and  the  time  cannot  be  far  distant  when, 
in  response  to  a  corresponding  sentiment,  there  will  come  about 
the  adequate  conservation  of  motherhood.  The  local  problem  in  this 
respect  is  merely  a  phase  of  what  is  a  national  question  of  the  first 
importance,  but  one  in  which,  unfortunately,  heretofore  the  required 
public  interest  has  not  been  forthcoming. 

The  same  conclusion  applies  to  the  question  of  tuberculosis,  which 
in  a  large  measure  remains  an  unsolved  problem,  and  more  so  perhaps 
in  California  than  in  any  other  section  of  the  country.  A  considerable 
proportion  of  the  tuberculosis  cases  in  California  are  indigent  patients 
from  other  States.  It  is  stated  in  the  report  of  the  commission  that  "in 
over  1 1  per  cent,  of  all  the  sickness  cases  applying  for  help  tuberculosis 
was  the  specific  disease."  In  some  sections  of  southern  California,  at 
Monrovia,  for  illustration,  a  large  proportion,  or  as  much  as  60  per 
cent.,  of  the  entire  mortality  is  from  tuberculosis.  According  to  a 
return  of  the  California  mortality  for  the  period  1907-11,  nearly  10 
per  cent,  of  the  mortality  from  tuberculosis  was  of  residents  who  had 
been  less  than  one  year  in  the  State,  but  this  proportion  was  only  3.5 
per  cent,  for  northern  and  central  California,  against  17  per  cent,  for 
southern  California.     In  other  words,   a  considerable  proportion  of 

22 


those  most  urgently  in  need  of  qualified  medical  attention  and  institu- 
tional treatment  in  the  State  of  California  would  not  be  representative 
of  the  wage-earning  element  of  the  State,  being  patients  in  the  incipient 
or  the  fairly  well-advanced  stage  of  the  disease,  with  their  legal  domiciles 
in  other  States.  In  the  absence,  therefore,  of  a  national  system  of 
compulsory  health  insurance  this  element,  most  urgently  in  need  of 
medical,  pecuniary  and  institutional  care,  would  still  be  unprovided  for. 
On  the  basis  of  far-from-sufficient  data  the  truly  momentous  con- 
clusion is  advanced  that  destitution  in  California  is  increasing  at  an 
alarming  rate,  that  an  annual  expenditure  of  about  $2,000,000  for  all 
forms  of  outdoor  relief  represents  an  "alarming  total,"  and,  that  "it 
is  evident  from  these  figures  that  sickness  among  wage-earning 
families  is  already  putting  a  tremendous  financial  burden  upon  public 
funds,"  and  that  "it  is  equally  evident  that  this  burden  has  been  grow- 
ing steadily  larger."  There  has  unquestionably  been  a  material  in- 
crease in  the  expenditures  for  county  outdoor  relief,  or,  specifically, 
from  $303,000  during  the  fiscal  year  1912-13  to  $680,000  during  the 
fiscal  year  1915-16.  In  proportion  to  the  population  of  California, 
however,  this  increase  represents  a  change  from  only  $0.1 16  to  $0,235 
per  capita.  There  is  nothing  in  the  report  to  indicate  that  even  at 
the  present  time  the  outdoor  relief  throughout  the  State  is  adequate 
and  well  adapted  to  the  needs  of  the  indigent  population.  Certainly 
as  regards  public  hospital  facilities  much  remains  to  be  done  to  meet 
even  the  most  reasonable  requirements  in  many  sections  of  the  State. 
As  pointed  out  by  the  commission,  "only  three  counties  of  the  State 
have  institutions  that  are  strictly  hospitals,"  and  of  the  remaining 
counties  it  is  said  that  the  "hospital"  is  a  combination  of  hospital 
proper  and  almshouse.  In  many  of  these  institutions  the  equipment 
and  the  general  housing  conditions  are  so  deficient  as  to  make  the 
hospitals  of  the  State  Board  of  Charities  and  Corrections  absolutely 
unfit  for  the  care  of  the  sick.  No  system  of  health  insurance  any- 
where would  remedy  this  lamentable  state  of  affairs.  No  system  of 
health  insurance  would  be  required  to  provide  adequate  hospital 
accommodations  in  proportion  to  the  population  concerned.  Even 
on  as  low  a  basis  as  five  beds  per  1,000  of  population,  and  including 
private  hospitals  managed  on  a  commercial  basis,  the  existing  accom- 
modation throughout  the  State  is  decidedly  deficient.  The  investiga- 
tion made  by  the  commission  into  the  hospital  situation  was  neither 
complete  nor  conclusive,  but  sufficient  proof  is  advanced  to  justify  the 
conclusion  that  much  remains  to  be  done  to  meet  even  minimum 
hospital  requirements  in  many  sections  of  the  State.  It  is  needless  to 
say,  of  course,  that  private  hospital  accommodation  would  be  largely 

23 


beyond  the  means  of  wage-earners  and  their  dependents.  This  is  as 
true  of  every  other  section  of  the  United  vStates  as  of  CaHfornia.  In 
the  absence  of  sufllcient  public  hospital  facilities,  some  progress  has 
been  made  in  the  direction  of  the  development  of  hospital  associations 
providing  institutional  treatment  for  their  members  at  reasonable 
cost.  This  development  is  inadequately  described  in  the  report, 
although  of  the  first  importance  to  a  not  inconsiderable  proportion 
of  the  wage-earners  of  the  State.  The  analysis  of  the  available 
statistics  is  faulty,  although  eighty  such  hospital  associations  were 
foimd  to  be  carrying  on  business  throughout  the  State.  Most  of  the 
members  pay  about  one  dollar  a  month,  "in  return  for  which  they  are 
entitled  to  medical  and  hospital  service  in  the  case  of  diseases  not  ex- 
cluded in  the  contract."  Being  more  or  less  similar  to  insurance 
organizations,  the  experiences  of  these  hospital  associations,  or  their 
methods  and  results,  should  have  been  subjected  to  critical  analysis 
as  a  really  useful  contribution  to  the  scientific  study  of  the  subject  of 
medical  and  institutional  care.  The  same  conclusion  applies  to  hos- 
pitals maintained  by  large  employers  of  labor,  such,  for  illustration, 
as  the  Southern  Pacific  Hospital,  with  more  than  50,000  members, 
and  the  Santa  Fe  Hospital  Association,  with  some  13,000  members. 
The  statistical  analysis  of  the  experiences  of  these  institutions  is  ex- 
tremely superficial,  for  attention  is  not  directed  to  the  fact  that  cases 
of  less  than  three  weeks'  duration  were  excluded  from  the  experience 
of  the  Southern  Pacific  Hospital,  whereas  the  experience  of  the  Santa 
Fe  Hospital  Association  includes  cases  of  all  durations.  This  differ- 
ence naturally  accounts  in  a  large  measure  for  the  fact  that  the 
average  duration  of  treatment  per  case  was  21.4  days  in  the  case  of 
the  Southern  Pacific  Hospital,  against  only  16.4  days  in  the  case  of 
the  Santa  Fe  Hospital. 

Reference  is  made  to  the  fact  that  twenty-four  of  the  lumber  com- 
panies of  the  State  make  more  or  less  adequate  provision  for  their 
employees  in  the  event  of  sickness,  but  no  descriptive  account  of  these 
institutions  is  included,  and  the  important  Scotia  Hospital  Association 
of  the  Pacific  Lumber  Company,  referred  to  in  the  report  as  "a  very 
interesting  organization,"  is  dismissed  with  a  reference  of  six  lines, 
regardless  of  the  fact  that  in  addition  to  giving  medical,  surgical  and 
hospital  service  the  association  provides  a  cash  benefit  as  well.  Fur- 
thermore, "This  Association  is  a  corporation  owned  and  operated  by 
the  employees  of  the  company."  A  sick  employee  who  is  in  the  hos- 
pital more  than  five  days  is  paid  one  dollar  a  day  up  to  seventy-five  days 
of  disability.  Here  is  a  social  institution  of  exceptional  importance  to 
the  people  of  the  State  dismissed  with  a  brief  reference  in  the  text. 

24 


In  marked  contrast,  the  methods  followed  in  Germany,  Austria,  Hun- 
gary, Luxemburg,  Great  Britain,  Russia,  Rumania,  Servia,  Norway, 
The  Netherlands,  Denmark,  Switzerland,  Sweden  and  France  take  up 
more  than  fifty  pages  of  the  report.  A  state  commission  on  social  in- 
surance concerning  itself  superficially,  if  at  all,  with  existing  methods 
of  insurance  and  relief  cannot  be  said  to  have  contributed  substantially 
to  the  subject-matter  of  its  inquiry  by  merely  reprinting  mostly  useless 
information  concerning  social-insurance  institutions  in  foreign  coun- 
tries, readily  available  through  the  reports  of  the  Federal  Bureau  of 
Labor  Statistics.  The  commission  was  not  appointed  for  the  purpose 
of  presenting  arguments,  but  for  the  purpose  of  ascertaining  conditions 
and  of  drawing  valid  and  impartial  conclusions  from  trustworthy  data 
more  or  less  sufficient  for  the  purpose.  The  commission  apparently 
was  entirely  directed  by  its  chief  investigator,  not  a  Californian,  but 
by  previous  connection  with  the  compulsory  health  insurance  prop- 
aganda thoroughly  under  the  influence  of  an  unfair  bias,  detrimental  to 
the  best  interests  of  the  people  of  the  State.  The  commission  appar- 
ently did  not  consult  or  utilize  existing  state  agencies  of  inquiry,  such 
as  the  State  Board  of  Health,  the  State  Board  of  Charities,  the  State 
Board  of  Labor  or  the  State  Department  of  Insurance,  each  and  all  of 
which  would  have  been  in  position  to  have  rendered  substantial  assis- 
tance in  the  ascertainment  of  the  facts.  If  these  state  departments 
were  consulted  or  utilized,  the  evidence  of  such  co-operation  was  not 
made  a  matter  of  public  record. 

The  most  lamentable  omission  from  the  report  of  the  commission 
was  the  correct  ascertainment  of  the  extent  to  which  the  wage-earners 
of  California  are  providing  for  their  own  needs  in  the  event  of  sickness 
or  disability  at  their  own  cost.  It  is  said  in  the  report  that  "a  pains- 
taking investigation  conducted  by  the  commission  disclosed  the  ways 
in  which  wage-earners  of  California  have  organized  to  protect  them- 
selves against  the  losses  due  to  illness,"  but  whatever  they  may  have 
done  or  left  undone  is  practically  disposed  of  in  fewer  than  twenty 
pages  of  the  text.  Curiously  enough,  the  statement  is  made  that  "in 
all  instances  some  form  of  health  insurance  was  the  method  of  pro- 
tection employed,"  regardless  of  the  fact  that  the  evidence  is  otherwise 
and  quite  conclusive  that  probably  not  more  than  one-third  of  the 
wage-earners  considered  it  necessary  to  insure  against  sickness  through 
some  form  of  fraternal  organization,  labor-union,  hospital  association, 
etc.  Nevertheless,  the  data  as  to  the  existing  amount  of  protection 
against  the  pecuniary  consequences  of  sickness  are  quite  impressive. 
Almost  300,000  members  of  fraternal  societies,  or  approximately  35 
per  cent,  of  the  total  membership,  were  entitled  to  sick  benefits,  aside 

25 


from  otlitr  insurance  and  social  advantages.  Ten  orders,  with  a  mem- 
bership ill  1915  of  over  146,000,  during  the  year  under  review  paid  out 
nearly  $81,000  on  account  of  sick  benefits  and  other  relief  measures. 
The  argument  is  advanced  by  the  commission,  but  without  conclusive 
evidence  tf)  support  it,  that  the  great  majority  of  the  members  repre- 
sent the  better-paid  wage-earners,  the  intimation  being  that  the 
fraternal  societies  failed  to  reach  the  lower  paid  labor  element,  most 
urgently  in  need  of  pecuniary  assistance  in  the  event  of  prolonged 
sickness,  which,  of  course,  is  a  self-evident  fact,  and  requires  no  statis- 
tical evidence  to  support  it.  Men  with  decidedly  insufficient  incomes 
and  whose  employment  is  precarious  or  whose  work  is  more  or  less 
casual  are  not  likely  to  constitute  the  majority  membership  of  fraternal 
beneficial  societies  more  or  less  inclusive  of  representatives  of  even  the 
professional  element.  That  such  societies  do  not  meet  all  possible 
demands  that  could  be  made  upon  them  in  the  event  of  sickness  or  dis- 
ability is  an  equally  foregone  conclusion.  This  fact,  however,  does 
not  justify  the  theory  advanced  by  the  commission  that  "the  inade- 
quateness  of  the  protection  they  afford  is  due,  however,  not  to  defects 
of  the  fraternal  orders,  but  to  the  fact  that  the  burden  which  health 
insurance  should  carry  and  which  they  are  attempting  to  sustain  is  too 
heavy  for  the  wage-earning  group  alone,  even  when  the  method  is 
lawful."  Since,  in  the  words  of  the  commission,  the  membership  of 
the  fraternal  orders  was  already  representative  of  the  better-paid 
wage-earners,  it  would  obviously  follow  that  the  proposed  exclusion  of 
wage-earners  with  incomes  above  $1,200  under  the  proposed  com- 
pulsory health-insurance  system  would  involve  an  undue  hardship  and 
possibly  tend  largely  to  defeat  the  very  purposes  of  this  proposed 
measure  of  radical  social  change. 

The  provision  made  by  trade-unions  for  their  members  in  the  event 
of  illness  is  disposed  of  in  less  than  a  single  page  of  the  text  of  the 
report,  or  about  the  same  amount  of  space  as  is  given  to  the  com- 
pulsory insurance  system  in  vogue  among  the  wage-earners  of  Servia. 
The  commission  points  out  that  "The  fact  that  trade-unions,  with  the 
many  other  interests  which  take  their  attention,  organize  and  main- 
tain a  sick-benefit  feature,  is  a  real  testimonial  of  the  need  of  health 
insurance,"  and  it  observes  that  "41  per  cent,  of  the  membership  of 
organized  labor  in  California  is  protected  during  illness  through  union 
action";  yet  no  more  is  said  about  this  most  important  aspect  of  the 
whole  problem.  It  would  be  difficult  to  find  more  conclusive  evidence 
of  bias  and  unfairness  in  any  other  section  of  the  report  or  in  any  other 
branch  of  the  alleged  "investigation  of  conditions  throughout  the 
United  States."     Holding  that  "the  protection  afforded  [on  the  part  of 

26 


trade-unions]  is  less  adequate  to  meet  the  needs  of  the  situation  than 
in  the  case  of  the  fraternals,"  the  commission  presents  no  evidence 
which  substantiates  this  conclusion,  which,  of  course,  was  considered 
of  the  first  importance,  for  it  should  not  be  such  a  difficult  matter  to 
initiate  changes  or  reforms  whereby  the  sickness-insurance  features  of 
trade-unions  could  at  least  be  raised  to  the  apparently  higher  status 
thus  far  attained  by  fraternal  organizations.  Nor  is  any  evidence  pro- 
duced to  show  that  the  commission  was  justified  in  its  final  conclusion 
concerning  the  sickness-insurance  methods  of  trade-unions  that  "the 
burden  which  health  insurance  should  carry  is  too  heavy  for  the  wage- 
earning  group  alone  to  sustain."  The  viewpoint  of  the  trade-unionist 
on  this  question  was  apparently  not  solicited  or  desired.  The  argu- 
ment unquestionably  advanced  by  them  would  have  been  that  the 
difficulty  could  be  much  more  easily  met  by  raising  wages  than  by 
establishing  a  burdensome  and  arbitrary  system  of  compulsory  health 
insurance. 

The  abbreviated  analysis  of  the  sickness-insurance  methods  of 
trade-unions  in  California  is  so  much  more  regrettable,  since  half  a 
dozen  pages  of  statistics  are  appended  to  the  report  providing  informa- 
tion of  a  considerable  degree  of  practical  usefulness. 

One  important  fact  is  generally  ignored  or  disregarded  by  social 
reformers  in  their  more  or  less  critical  attitude  towards  the  social 
policy  of  labor-unions.  Much  more  is  involved  in  the  persistent 
struggle  for  existence  and  the  gradual  attainment  of  a  higher  standard 
of  labor  and  life  on  the  part  of  organized  wage-earners  than  even  the 
most  adequate  and  effective  provision  in  the  event  of  sickness  or  death. 
Trade-unionists  are  thoroughly  well  aware  of  the  need  of  insurance  pro- 
tection, but  they  even  more  clearly  realize  it  to  be  the  imperative  duty 
of  the  State  to  secure  to  the  wage-earners  and  their  dependents  the 
most  wholesome  conditions  of  life,  as  reflected  in  the  lowest  attainable 
rate  of  sickness  and  mortality.  They  do  not  delude  themselves  with 
the  fiction  that  by  providing  so-called  health  insurance  they  have  suc- 
ceeded in  raising  materially,  if  at  all,  the  social  or  economic  status  of 
their  membership.  They  are  well  aware  that  any  and  all  unnecessary 
sickness  can  be  and  should  be  eliminated  by  community  action  ade- 
quately sustained  by  a  liberal  health  policy  on  the  part  of  the  locality, 
the  State  and  the  nation,  as  a  whole.  The  memberships  of  trade- 
unions  have  rarely  failed  to  provide  at  least  a  minimum  of  financial 
support  in  the  event  of  sickness  in  branches  of  industries  or  occupations 
exceptionally  unhealthful  or  unduly  predisposed  to  a  high  death  rate. 
The  leaders  of  the  labor-union  movement  are,  therefore,  at  least  for 
the  time  being,  and  rightly  so,  concentrating  their  efforts  rather  upon 

27 


higher  wages  and  shorter  hours,  upon  the  ehmination  of  unnecessary 
child-hibor  and  the  labor  of  women  in  industries  unsuitable  to  the  sex, 
unduly  prolonged  hours  in  the  continuous  industries,  nightwork,  etc. 
To  the  extent  that  they  are  successful  in  these  directions  they  are 
raising  the  social  and  economic  status  of  wage-earners  and  their  fam- 
ilies, with  a  consequent  improvement  in  physical  strength,  health  and 
longevity.  What  they  have  done  in  their  own  behalf  in  this  or  other 
countries,  and  of  their  own  free  choice  in  the  direction  of  voluntary 
thrift,  should  be  of  far  more  importance  to  a  commission  on  the  in- 
vestigation of  social  insurance  than  what  has  been  done  for  under-paid 
and  under-nourished  wageworkers  and  their  dependents  in  other 
countries,  such  as  Germany,  Russia  or  Rumania,  as  the  case  may  be. 

The  report  of  the  commission  does  not  present  an  intelligent  or 
convincing  estimate  of  the  probable  cost  of  a  system  of  compulsory 
health  insurance  in  conformity  to  the  principles  incorporated  into  the 
so-called  standard  bills.  The  ' 'estimates  of  costs' '  are  largely  statistical 
statements  of  very  limited  intrinsic  value  for  the  purpose  of  determin- 
ing even  approximately  the  probable  annual  expense  to  the  employees, 
the  employers  and  the  State.  The  assumed  rate  of  sickness,  in  the 
absence  of  a  sufficiently  extended  inquiry,  is  merely  a  matter  of  con- 
jecture, and  the  blind  reliance  placed  upon  so-called  "European  ex- 
perience" is  merely  additional  evidence  of  the  strong  European  bias 
characteristic  of  the  report  as  a  whole.  The  details  of  the  lodge  and 
trade-union  experiences  more  or  less  utilized  are  not  presented  with 
the  required  fullness  to  permit  of  a  critical  examination  as  to  the 
accuracy  of  the  conclusions  arrived  at.  The  experience  of  British 
friendly  societies  and  of  American  fraternal  orders  prove  that  very 
little  reliance  can  be  placed  upon  averages  of  sickness-duration  with- 
out a  thorough  knowledge  of  the  underlying  administrative  principles, 
which  vary  widely  in  all  institutions  of  this  kind.  Accepting  as  cor- 
rect, for  illustration,  the  average  duration  of  sickness  in  the  experience 
of  the  Independent  Order  of  Odd  Fellows,  given  as  65  days,  it  is  self- 
evident  that  something  besides  sickness  must  have  been  included,  for 
such  a  high  average  lies  quite  outside  of  the  range  of  normal  sickness  ex- 
perience. If  it  is  true  that  in  the  lodge  experience  of  California  the 
proportion  of  sickness  per  annum  was  "only  10  per  cent.,  as  against 
30  per  cent.,  40  per  cent,  or  even  50  per  cent,  under  some  compulsory 
systems,"  it  would  be  extremely  interesting  to  have  a  valid  explana- 
tion of  such  a  profound  disparity  in  sickness  frequency  between  the 
State  of  California  and  the  European  countries  under  social  insurance, 
asserted  to  have  so  materially  improved  the  health  conditions  of  the 
people  concerned.     If  the  proportion  of  persons  sick  per  annum  has 

28 


been  only  10  per  cent,  it  is  equally  difl5cult  to  understand  why  the 
average  duration  of  sickness  in  lodge  experience  should  have  been  38 
days,  unless  only  the  most  serious  cases  of  sickness  required  considera- 
tion. That  conclusion  might  readily  follow  in  view  of  the  well-known 
reluctance  on  the  part  of  many  members  to  make  claims  for  payment 
on  account  of  sickness  of  comparatively  short  duration.  Since  the 
term  "sickness"  has  not  been  successfully  defined  in  law  or  insurance 
practice,  much  evidently  will  depend  upon  the  viewpoint  adopted  in 
the  actual  administration  of  whatever  system  may  be  established. 
The  assumption  on  the  part  of  the  commission  that  "on  the  basis  of 
all  this  accumulated  evidence  a  sick  rate  of  six  days  may  be  assumed 
for  the  purpose  of  making  an  estimate  of  the  cost"  is  of  very  doubtful 
validity.  A  true  sick  rate  of  six  days  per  annum  is  exceedingly  low 
and  not  likely  to  be  experienced  under  a  liberally  administered  com- 
pulsory health-insurance  act.  With  this  experience  at  the  outset  the 
results  observed  in  European  countries  would  unquestionably  follow, 
and  the  average  duration  of  sickness  would  continue  to  rise  in  propor- 
tion as  the  beneficiaries  developed  a  tendency  to  rely  more  and  more 
upon  the  funds  and  exact  therefrom  the  largest  measure  of  returns, 
paid  for  by  their  own  contributions  to  the  extent  of  only  40  per  cent. 

In  the  absence  of  trustworthy  basic  data,  one  assumption  after 
another  is  made  use  of  to  arrive  at  the  final  conjectural  estimate  of 
ultimate  cost.  Provisionally,  for  illustration,  "an  average  hospital 
rate  of  $1.00  per  insured"  is  assumed.  Provisionally,  "It  is  felt  that 
by  doubling  the  amount  spent  in  Leipzig,  or  assigning  $2.00  per  capita 
for  drugs,  sufficient  provision  is  made."  Provisionally,  "an  arbitrary 
assumption  of  $1.00  per  capita  has  been  made,  which  is  thought 
sufficient  to  provide  a  fund  out  of  which  the  hygienic  care  of  the  teeth 
may  be  given  to  the  insured."  Estimating  the  number  of  persons  who 
would  come  under  the  act,  in  the  absence  of  really  trustworthy  data, 
and  estimating  the  probable  rate  of  sickness,  which  it  is  frankly  con- 
ceded represents  not  sickness  exclusively,  but  rather  compensated  days 
of  absence  from  work,  and  estimating  the  cost  of  medical  aid,  readily 
conceded  to  be  an  even  more  difficult  matter  than  an  estimate  of  the 
cost  of  cash  benefits,  plus  conjectures  and  estimates  as  to  the  cost  of 
hospital  care  and  drugs,  without  reference  to  the  probable  cost  of 
nursing,  maternity,  etc.,  the  "final  computation  of  cost"  for  such  a 
system  of  compulsory  health  insurance  for  the  State  of  California  as 
the  commission  seems  to  have  had  in  mind  is  placed  at  from 
$17,332,000  to  $28,780,000,  depending  more  or  less  upon  the  inclusion 
or  the  exclusion  of  the  wage-earner's  family,  and  the  assumed  per- 
capita  expense  for  medical  aid.     This  total,  however,  it  is  pointed  out 

29 


by  tlic  coniinission,  "must  not  be  quoted  without  many  qualifications," 
such,  for  iUustration,  as  the  inclusion  or  exclusion  of  certain  special 
groups  of  wage-earners,  the  inclusion  or  exclusion  of  certain  benefits 
from  the  bcfiinning,  variations  in  the  cost  of  the  various  benefits  from 
the  various  assumptions  made  in  the  computation,  the  effect  of  varia- 
tions in  the  cost  of  medical  aid,  and,  finally,  the  wage-earners'  actual 
participation  in  the  plan,  or  the  continuity  of  the  rate  of  contributions, 
or  conversely,  the  rate  of  lapse  or  forfeiture,  etc.  Thus  one  assump- 
tion is  followed  by  another,  one  conjecture  is  made  to  qualify  another, 
leaving  no  alternative  to  the  fair-minded  critic  of  statistical  and 
actuarial  methods  than  that  the  entire  "computation  and  cost"  will 
not  bear  analysis. 

The  annual  cost  to  the  people  of  the  State  of  California  may  be 
easily  in  excess  of  $30,000,000  and  it  may  fall  below  $15,000,000.  It 
all  depends  upon  the  strict  construction  of  terms  and  the  more  or  less 
rigid  enforcement  of  the  law.  The  California  commission  assumes  a 
rate  of  sickness  of  six  days  per  annum,  based,  apparently,  upon  the 
experience  had  with  some  1,200  wage-earners  of  the  State,  whereas 
the  proposed  act  is  intended  to  include  nearly  2,000,000.  The  wage 
estimates  are  largely  adjusted  upon  one  hypothesis  or  another  and  are 
not  sustained  by  a  qualified  analysis  of  a  sufficient  amount  of  pay-roll 
experience  typical  of  the  State  of  California  at  the  present  time.  The 
probable  amount  of  unemployment  is  more  or  less  a  matter  of  guess- 
work opinion,  and  insufficient  allowance  is  made  for  the  very  excep- 
tional economic  conditions  in  California  on  account  of  the  exposition 
of  1915  and  the  two  or  three  years  preceding  it.  Maternity  benefits 
to  female  workers  are  estimated,  in  the  absence  of  thoroughly  trust- 
worthy data  for  the  State  of  California,  at  16.4  per  1,000  of  population. 
It  is  then  assumed  that  maternity  benefits  will  be  equal  to  two-thirds 
of  the  wages  during  eight  weeks,  and  it  is  assumed  that  the  medical 
aid,  including  nursing  and  maternity,  "may  be  estimated  at  an  aver- 
age of  about  $25  per  case."  Thus  the  "cost  per  female  employee  is 
arrived  at  to  be  equal  to  35  cents  per  1,000  insured."  For  burials, 
the  "assumed  value  of  benefit  of  $50  per  funeral"  is  based  on  an  esti- 
mate of  the  mortality  rate  among  employees  merely  as  a  matter  of 
statistical  conjecture  and  is  not  derived  from  data  relating  to  trust- 
worthy experience.  The  death  rate  for  males  is  given  as  16.3  per 
1,000,  while  for  females  the  rate  is  placed  at  6.1.  "A  considerable 
difference  in  the  death  rate  between  men  and  women  is  easilv  explained 
by  the  great  difference  in  age  distribution,"  which  may  or  may  not 
be  true  under  a  compulsory  system  of  health  insurance.  The  assumed 
cost  of  medical  service,  placed  at  from  four  to  six  dollars  per  capita,  is 

30 


mere  guesswork  opinion,  since  the  viewpoint  of  the  State  Medical 
Society  was  not  solicited,  and  the  ultimate  agreement,  if  one  should 
come  into  existence,  would  unquestionably  be  in  the  form  of  collective 
bargaining  possibly  more  to  the  advantage  of  the  medical  profession. 
Regardless  of  what  rate  might  be  adopted  at  the  outset,  the  tendency 
would  be  persistently  in  the  direction  of  a  higher  per-capita  fee,  as 
best  illustrated  by  the  experience  of  the  Leipzig  Communal  Sick  Fund 
before  and  subsequent  to  the  present  war.  In  1887  the  per-capita 
payment  was  3  marks  per  member  per  annum,  including  the  care  of 
the  family.  During  practically  every  year  thereafter  successful 
efforts  were  made  to  bring  about  an  increase  in  the  per-capita  payment, 
reaching  4.50  marks  by  1898.  During  1904  the  medical  society 
secured  a  further  concession  by  having  the  fee  increased  to  5  marks, 
and  by  having  the  wage-earner's  family  excluded.  This  was  changed 
again  in  1905,  when  the  medical  fee  was  increased  to  6.50  marks,  fur- 
ther increased  in  1911  to  7.25  marks,  in  1914  to  7.50  marks,  and  in 
1917  to  7.75  marks.  It  is  stated  in  the  report  for  1917  that  negotia- 
tions were  then  in  progress  aiming  at  a  per-capita  fee  of  8.50  marks 
during  1918-19.  No  valid  objections  can  be  raised  against  the 
proper  and  even  very  liberal  compensation  of  the  medical  profession. 
No  men  perform  more  arduous  and  exacting  duties.  No  policy  on  the 
part  of  the  State  could  be  more  detrimental  to  the  welfare  of  the  people 
than  the  lowering  of  the  status  of  the  medical  profession  by  the  adop- 
tion of  a  scale  of  payments  favorable  to  an  incompetent  or  mediocre 
practitioner.  If  the  medical  profession  should  permit  itself  to  be 
drawn  into  a  system  of  collective  bargaining  in  the  furtherance  of  a 
plan  of  compulsory  health  insurance,  it  would  seem  to  be  a  foregone 
conclusion  that  in  time  the  preference  would  be  for  a  more  or  less  ex- 
tended state  medical  service,  free  from  the  bureaucratic,  arbitrary  and 
largely  unnecessary  burden  of  a  quasi-insurance  institution.  The  cost 
of  such  a  system  of  state  medicine  could  be  much  more  easily  assessed 
in  the  form  of  a  direct-income  tax,  collected  through  the  existing 
state  machinery  and  with  the  certainty  that  a  very  considerable 
proportion  of  seemingly  unavoidable  waste  and  loss  would  be  avoided. 
The  presentation  of  assumptions,  conjecture  and  guesswork  opinion 
is  not  to  be  construed  as  the  rigid  fulfilment  of  a  serious  obligation  im- 
posed on  the  part  of  the  vState  upon  a  commission  appointed  for  the 
purpose  of  making  inquiry  into  a  social  question  of  far-reaching  im- 
portance to  the  people  concerned. 

The  final  computation  of  cost  is  the  most  severe  condemnation 
of  the  report  and  of  the  value  or  validity  of  the  recommendations 
made   by    the    commission    in    the    introduction    thereto.      There   is 

31 


nothing  to  indicate  that  the  commission  concerned  itself  in  the 
least  with  the  larger  problem  of  disease  prevention,  of  which  so 
much  has  been  made  in  the  propaganda  for  compulsory  health 
insurance.  No  means  are  indicated  by  which  the  death  rate  of 
the  vStatc  would  be  lowered  or  by  which  the  existing  amount  of  ill- 
ness would  be  reduced.  In  their  observations  on  the  cost  of  a  tuber- 
culosis benefit,  reliance  is  placed  upon  the  experience  of  the  city  of 
Leipzig,  regardless  of  the  fact  that  the  tuberculosis  problem  in  Southern 
California  especially  concerns  a  largely  indigent  population  with  its 
legal  domiciles  in  other  States.  The  much  praised  German  Sana- 
torium treatment  for  tuberculous  wage-earners  falls  conspicuously 
below  what  is  being  done  in  this  country.  The  average  duration  of 
treatment  is  less  than  ninety  days,  whereas  every  authority  on  the 
subject  is  on  record  to  the  effect  that  no  lasting  results  can  be  secured 
during  so  short  a  period  of  time  in  other  than  the  most  incipient  cases 
of  the  disease.  In  the  United  States  the  average  duration  of  treat- 
ment is  nearer  one  hundred  and  eighty  days  than  ninety  days,  as  best 
illustrated  by  the  practice  of  the  Municipal  Tuberculosis  Sanatorium 
of  the  city  of  Chicago,  where  some  900  patients  are  being  taken  care 
of  in  a  more  satisfactory  manner  than  at  any  corresponding  institution 
in  Germany.  For  the  California  commission,  therefore,  to  rely  in 
its  calculations  upon  the  experience  of  the  city  of  Leipzig  is  merely 
further  evidence  of  foreign  bias,  the  inconclusiveness  of  the  arguments 
advanced,  and  the  practical  certainty  that  the  results  of  actual  experi- 
ence, under  whatever  system  of  compulsory  health  insurance  might 
be  adopted  would  prove  a  most  serious  disappointment. 

None  of  the  recommendations  of  the  California  commission  are 
likely  to  receive  the  favorable  consideration  of  the  people  of  the 
State.  The  report  itself,  or  at  least  the  major  portion  thereof,  was 
the  work  of  a  professional  investigator  and  not  the  joint  labor 
of  the  members  of  the  commission,  more  or  less  unfamiliar  with 
the  subject  as  a  whole  or  with  any  one  of  its  essential  parts.  They 
therefore  say  in  their  recommendations  that  "To  draft  even  a 
tentative  bill  for  health  insurance  in  California  at  this  time  has 
seemed  to  the  commission  premature."  They  say  further  that 
"While  the  commission  is  not  ready  to  discuss  details  of  a  system, 
it  is  convinced  that  the  form  of  organization  contemplated  by  the 
well-known  bill  of  the  American  Association  for  Labor  Legislation 
will  certainly  give  rise  to  certain  difficulties  which  can  be  avoided 
through  another  plan  of  organization  and  which  must  be  avoided  in  a 
system  designed  to  meet  conditions  in  California."  They  point  out 
that  the  plan  suggested  in  the  bill  of  that  association  "places  voluntary 


32 


societies  at  such  a  competitive  disadvantage  as  practically  to  bar  them 
out  from  any  participation  in  health  insurance,"  and  furthermore  that 
"Knowing  the  many  difficulties  and  complexities  of  its  own  with  which 
health  insurance  must  grapple,  the  commission  favors  a  form  of  organ- 
ization which  does  not  force  employers  and  employed  to  join  in  the 
administration  of  the  system,  and  for  this  reason  opposes  the  plan 
proposed  by  the  American  Association  for  Labor  Legislation,  which 
places  the  local  control  of  health  insurance  in  the  hands  of  district 
mutual  associations  governed  jointly  by  the  employers  and  the  em- 
ployed." Under  such  a  system  the  commission  fears  that,  "with  the 
administration  in  the  hands  of  representatives  of  these  two  groups, 
there  would  be  a  likelihood  of  deadlock  on  disputed  issues."  For  this^^ 
and  other  reasons  the  commission  repeats  that  it  is  therefore  "opposed 
to  the  plan  of  organization  suggested  in  the  bill  under  discussion  be- 
cause the  method  which  provides  for  selecting  those  who  are  to  ad- 
minister the  health-insurance  system  gives  no  assurance  that  persons 
of  special  fitness  or  ability  will  be  chosen."  How  these  conclusions 
were  arrived  at  is  not  a  matter  of  record  in  the  report  itself.  The  evi- 
dence regarding  the  deliberations  of  the  commission  on  these  essential 
matters  was  apparently  not  considered  worth  printing. 

The  section  of  the  report  containing  the  discussion  of  possible 
provisions  of  a  health-insurance  system  for  California  is  apparently  a 
matter  separate  and  distinct  from  the  text  of  the  report,  written  and 
prepared,  digested  and  arranged,  by  the  commission's  chief  investigator 
as  the  personal  representative  of  the  American  Association  for  Labor 
Legislation,  with  its  offices  in  the  city  of  New  York;  yet,  while  all  the 
vital  provisions  of  the  so-called  standard  bills  promoted  by  that  associa- 
tion were  flatly  condemned  by  the  California  commission,  the  state- 
ment was  nevertheless  made,  and  widely  disseminated  by  that  associa- 
tion, that  "The  findings  are  for  the  most  part  in  complete  harmony^ 
with  those  of  the  American  Association  for  Labor  Legislation,  although 
in  two  or  three  particulars,  especially  that  of  joint  representation  of 
employers  and  employees  in  the  administration  of  the  funds,  the  Cali- 
fornia commission  dilTered  from  the  plan  proposed  by  the  association 
in  its  standard  bill.  The  latter  plan,  however,  has  behind  it  the 
authority  of  successful  practical  experience  in  nine  European 
countries,  a  plan  worked  out  in  America  by  a  national  committee 
of  social-insurance  experts,  with  the  advice  and  assistance  of 
hundreds  of  people  throughout  the  United  States  during  the  past 
four  years."*     In  other  words,   the  findings  on  matters  of  fact  by 

*Of  particular  tnlerest  in  tliis  connection  is  an  article  by  Edward   T.  Dcvine   in  Thr  Survey  of      ^ 
October  26,  1918.  on  "Will  California  Lead?"     The  results  of  the  election  are.  however,  not  referred 
to  in  subsequent  issues  ot  The  Survey.     California  did  "lead,"  but  not  as  expected  by  the  propagandists 
for  compulsory  health  insurance. 

33 


tlic  California  coniniission  concerning  conditions  in  a  representative 
American  Stale  are  ruthlessly  set  aside  by  the  self-appointed  "experts" 
of  the  American  Association  for  Labor  Legislation,  in  fatuous 
rcHaiuc  upon  the  so-called  experience  of  nine  European  countries, 
including  Russia,  Rumania,  and  Ser.via.  More  wisely  and  to  the 
point  the  first  California  commission  recommended  the  careful  con- 
sideration of  the  subject  by  the  people  of  the  vState,  and  particularly 
the  (juestion  as  to  the  adoption  of  a  constitutional  amendment  declar- 
ing it  to  be  "the  policy  of  the  State  of  California  to  make  special  pro- 
vision for  the  health  and  welfare  of  this  class  of  persons  and  their 
dependents  whose  incomes,  in  the  determination  of  the  legislature,  are 
not  sufficient  to  meet  the  hazard  of  sickness.  The  legislature  may 
establish  a  health-insurance  system  applicable  to  any  or  all  such  per- 
sons, and  for  the  linancial  support  of  such  system  might  provide  for 
contributions,  either  voluntary  or  compulsory,  from  such  persons,  from 
employers,  and  from  the  State  by  appropriation."  While,  therefore, 
the  implication  is  justified  that  the  commission,  in  its  final  conclusion, 
felt  constrained  to  take  a  favorable  view  regarding  the  possible 
adoption  of  a  system  of  health  insurance,  it  left  the  details  of  such  a 
plan  to  the  people  of  the  State,  as  a  matter  of  public  policy  demand- 
ing the  most  serious  and  impartial  consideration  of  all  concerned  in 
the  welfare  of  the  State.* 

*For  additional  information  regarding  the  vote  on  the  proposed  Constitutional  Amendment  see  pages 
105,  111,  112  and  186. 


34 


FIRST  REPORT    OF  THE  MASSACHUSETTS  SPECIAL 
COMMISSION   ON  SOCIAL  INSURANCE,    FEBRUARY,    1917 

Under  date  of  June  1,  1916,  a  Social  Insurance  Commission  was 
appointed  by  the  State  of  Massachusetts,  which  transmitted  its  report 
to  the  legislature  during  the  month  of  January,  1917.  This  commis- 
sion concerned  itself  primarily  with  the  problem  of  poverty  and  the 
economic  conditions  of  the  wage-earners  in  Alassachusetts,  as  well  as 
with  the  general  question  of  sickness  or  health  insurance,  existing 
health  insurance  agencies  and  the  prevailing  amount  of  sickness 
throughout  the  Commonwealth.  Since  the  commission  did  not  make 
a  unanimous  report,  a  concise  analysis  of  the  evidence,  the  conclusions 
and  the  recommendations  is  a  matter  of  some  practical  difficultv. 
Aside  from  the  question  of  insurance,  the  commission  concerned  itself 
also  with  old-age  pensions  and  unemployment.  At  the  outset  the 
commission  directed  attention  to  the  causes  of  poverty,  first  among 
which  they  include  feeble-mindedness,  insanity,  intemperance,  low 
wages,  want  of  vocational  training  and  want  of  thrift.  No  really 
useful  conclusions  are  advanced  with  reference  to  these  causes  or  con- 
ditioning circumstances;  but  it  is  frankly  conceded  that  the  paucity  of 
definite  information  on  a  number  of  questions  is  of  serious  public  con- 
cern. The  commission  points  out,  for  illustration,  that  "There  appear 
to  be  no  accurate  statistics  regarding  the  family  incomes  of  wage- 
earners,"  and  while  it  recognizes  "that  it  is  normal  and  desirable  that 
the  individual  should  himself  make  adequate  provision  for  the  hazards 
of  life,"  it  appropriately  remarks  that  there  are  groups  of  individuals 
of  insufficient  earning  power  or  whose  savings  have  been  lost  because 
of  a  want  of  natural  business  training,  etc.,  and  that,  therefore,  "The 
State  which  merely  counsels  thrift  to  such  an  individual  but  mocks 
him."  It  gives  expression  to  the  unanimous  opinion  "that  the  prin- 
ciple of  insurance  is  a  desirable  one  for  application  on  a  sufficiently 
wide  scale  to  safeguard  every  wage-earner  in  the  Commonwealth  from 
certain  of  the  evils  of  sickness,  unemployment  and  old-age,"  but  it 
does  not  bring  forward  a  feasible  plan  whereby  such  a  purpose  can 
be  achieved  in  a  manner  satisfactory  to  all  concerned.  It,  however, 
lays  down  the  fundamental  principle  "that  a  man  who  makes  a  fair 
attempt  to  earn,  support  his  family  decently  and  save  something  shall 
not  under  any  circumstances  be  allowed  to  become  altogether  destitute 
or  required  to  accept  pauper  relief."     In  this,  as  well  as  in  many  other 

35 


important  matters,  the  commission  merely  restates  the  clearly  recog- 
nized problems  and  difiiculties  of  social  and  industrial  life,  some  of 
which,  unquestionably,  admit  of  no  practical  solution.  It,  neverthe- 
less, is  of  the  first  importance  that  even  in  its  bare  outline  the  state- 
ment of  a  problem  should  rest  upon  a  reasonably  trustworthy  basis  of 
fact  or  qualified  opinion,  and  the  commission  properly  emphasizes  the 
viewpoint,  with  special  reference  to  sickness  or  health  insurance  and 
existing  agencies  on  account  thereof,  that  "Any  legislative  considera- 
tion of  the  subject  should  be  based  upon  a  knowledge  of  conditions  as 
they  now  exist."  From  such  investigations  as  the  commission  was  in 
a  position  to  make  the  conclusion  was  reached  that  "there  exists 
already  in  the  Commonwealth  a  very  general  appreciation  of  the  value 
of  the  insurance  principle  as  a  protection  against  the  economic  results 
of  illness,"  and  that  "there  are  numerous  attempts  among  wage-earners 
to  apply  the  principle  in  various  insurance  plans."  But,  unfortu- 
nately, as  the  commission  points  out,  "The  results  fall  very  far  short 
of  the  ideal."  The  investigations  made  by  the  commission  were 
insufficient  for  the  purpose,  and  the  number  of  wage-earners  insured 
with  existing  institutions  was  not  ascertained  or  at  the  time  was  not 
ascertainable.  The  commission,  however,  directs  attention  to  the 
perfectly  obvious  fact  that  "the  uninsured  class  includes  the  highest 
proportion  of  the  thriftless  and  of  those  of  very  small  means."  It  cer- 
tainly requires  no  legislative  or  other  investigation  to  prove  what  is  a 
matter  of  natural  inference  and  common  observation  in  everyday  life. 

Having  found  it  difficult,  if  not  impossible,  to  ascertain  the  ex- 
isting amount  of  health  insurance,  the  commission  also  failed  in  its 
attempt  to  determine  the  amount  of  sickness  prevailing  among  the 
wage-earners  of  the  State.  They  make  use  of  the  data  secured  by 
means  of  a  sickness  survey  of  the  city  of  Boston  by  the  Metropolitan 
Life  Insurance  Company  for  two  weeks  of  July,  1916.  According  to 
this  survey  the  proportion  of  sickness  was  19.6  persons  per  1,000,  or 
not  quite  2  per  cent.  The  average  number  of  days  sickness  per  annum, 
the  apparent  equivalent  of  loss  of  earning  power,  was  placed  by  this 
survey  for  Greater  Boston  at  7.15  days.  The  true  loss  of  working- 
time  on  account  of  sickness,  which,  of  course,  is  not  the  equivalent  of 
loss  of  earning  power,  which  may  be  more  or  less  voluntary,  was  only 
6.6  days  per  annum. 

Aside  from  the  Metropolitan's  sickness  survey,  the  commission 
made  use  of  data  provided  by  the  Instructive  District  Nursing  Asso- 
ciation of  Boston,  limited,  however,  to  the  present  medical  care  among 
the  very  poor.  The  serious  error  of  practically  all  such  investigations 
is  to  concentrate  public  interest  upon  the  lamentable  social  or  eco- 

36 


nomic  condition  of  the  very  poor,  which  under  no  existing  health- 
insurance  system  can  be  provided  for,  except  on  the  basis  of  systematic 
contributions  as  applied  to  wage-earners  of  a  higher  status.  As  long  as 
any  system  of  insurance  is  made  to  rest  upon  periodical  contributions, 
more  or  less  proportionate  to  the  benefits  granted,  the  very  poor  by  the 
very  fact  of  their  poverty  are  obviously  precluded  from  continued 
participation.  To  relieve  the  casual  laborer  or  the  habitually  more  or 
less  unemployed  from  the  making  of  systematic  contributions  is  merely 
a  means  of  providing  a  larger  amount  of  poor-relief  under  the  pretense 
of  insurance  through  general  taxation.  If  the  very  poor  pay  10  per 
cent,  of  the  total  cost  of  an  adequate  system  of  sickness  insurance  and 
the  moderately  well-paid  labor  element  (earning  less  than  $1,200  a 
year)  pays  40  per  cent,  of  the  cost,  the  difference  is  clearly  an 
economic  advantage  in  the  case  of  the  very  poor.  Such  an  advantage 
is  poor-relief  in  precisely  the  same  sense  as  if  it  were  paid 
direct  through  existing  poor-law  agencies  in  the  form  of  grants  in  aid 
or  frankly  conceded  outdoor  relief.  However  lamentable  or  deplor- 
able the  condition  of  the  very  poor  may  be,  it  has  but  a  very  remote,  if 
any,  bearing  whatever  upon  the  more  successful  solution  of  the  social 
and  economic  problems  of  the  independent  wage-earning  element  of 
the  people  of  any  given  State.  The  problem  of  adequate  medical 
relief  must  necessarily  be  seriously  felt  by  the  very  poor.  It 
requires  no  elaborate  inquiry  or  the  findings  of  a  state  commission  to 
substantiate  this  obvious  truth.  The  medical  problems  of  the  very 
poor  are  widely  different  from  those  of  the  independent  wage-earning 
element,  and  yet  it  is  persistently  argued  that  the  solution  of  the 
problems  of  the  latter  are  to  be  conditioned  by  the  perplexities  and 
difficulties  of  the  former.  They  have  little  in  common,  and  the 
so-called  "vicious  circles"  of  poverty  and  disease  are  strictly  limited  to 
a  small  remnant  of  the  population,  whose  deplorable  condition  is 
primarily  determined,  as  pointed  out  by  the  commission,  by  feeble- 
mindedness, intemperance,  low  wages,  want  of  vocational  training,  etc. 
It  is  precisely  the  better  physical  and  mental  status,  the  better  habits 
and  higher  degree  of  self-control,  the  higher  wages  and  lesser  amount 
of  unemployment  and,  last  but  not  least,  the  higher  education  and 
training  for  industrial  or  other  pursuits  that  safeguard  effectively  the 
independent  wage-earner,  and  chiefly  through  his  own  efforts,  against 
the  physical  and  economic  consequences  of  sickness  and  premature 
death. 

The  error  which  underlies  the  majority  of  legislative  investigations 
into  the  problems  of  poverty  and  methods  of  relief  is  that  attention  is 
directed  to  the  so-called  causes  of  the  poverty  of  those  who  live  below 

37 

.'570899 


the  readily  iitlainable  standard  of  living,  and  not  to  the  question  as  to 
how  and  why  tlie  vastly  larger  number  of  men  and  women  of  more  or 
less  corresponding  intelligence,  family  connections,  industrial  status, 
etc.,  are  living  in  comfort  and  economic  independence  in  old-age. 
Instead  of  ascertaining  the  means  whereby  men  and  women  in  their 
own  way  and  at  their  own  cost  raise  themselves  or  maintain  them- 
selves above  the  level  of  pauperism  and  the  necessity  of  public  support, 
the  oflicial  inquiry  almost  invariably  concerns  itself  with  the  question 
as  to  how  a  relatively  small  number  of  men  and  women  have  failed  to 
do  so.  Now,  the  truth  to  be  derived  from  the  former  is  fundamentally 
constructive,  whereas  information,  however  trustworthy,  concerning 
the  latter  is  generally  inconclusive  and  often  for  all  practical  purposes 
useless  and  inapplicable  to  the  end  in  view. 

Realizing,  clearly,  the  magnitude  of  the  problem  and  the  utter  in- 
adequacy of  the  suggested  solution,  the  commission  was  unanimous 
"in  vol  recommending  any  health-insurance  legislation  for  immediate 
passage."  There  was  a  diversity  of  opinion  among  the  different 
members,  and  some,  at  least,  advanced  the  view  that  the  Common- 
wealth, "as  soon  as  there  has  been  adequate  consideration  of  the 
details  of  legislation,  should  adopt  a  general  system  of  health  insurance 
for  wage-earners,  supported  by  enforced  contributions  from  employers, 
employees  and  the  State."  Other  members  of  the  commission  held 
stronglv  dissenting  views,  so  that  no  final  recommendations  were 
agreed  upon. 

The  report  of  the  first  Massachusetts  commission  includes  an  inter- 
esting appendix  of  the  probable  social  and  economic  cost  of  sickness 
among  wage-earners  in  Massachusetts.  On  the  basis  of  the  returns 
made  by  labor-unions  and  fraternal  organizations  operating  in  the 
State,  the  annual  cost  per  wage-earner  on  account  of  sickness  was 
placed  at  $25.70;  but  this  estimate  was  largely  a  matter  of  conjecture, 
and  in  matters  of  important  details,  as  was  the  corresponding  estimate 
for  the  vState  of  California,  made  practically  to  rest  upon  the  same  theo- 
retical assumptions.  Out  of  1,425  local  labor-unions,  399  made  reply  to 
a  questionnaire,  and  of  these  129,  or  32.3  per  cent.,  were  paying  some 
kind  of  sick-benefit.  According  to  a  corresponding  return  for  the 
year  1908,  the  proportion  of  labor-unions  which  paid  sick  benefits 
during  that  year  was  28.5  per  cent.,  so  that  there  was  evidently  an  in- 
crease in  the  tendency  on  the  part  of  labor-unions  to  include  with  other 
social  and  economic  functions  the  payment  of  a  stated  amount  of 
pecuniary  support  in  the  event  of  sickness,  no  doubt,  how^ever,  more 
or  less  undefined.  The  labor-unions  which  had  developed  the  most 
satisfactory  systems  were  those  of  the  bakers,  barbers,  boot  and  shoe 


38 


workers  and  plumbers.  Out  of  314  fraternal  organizations,  only  113 
made  reply,  but  of  these  73,  or  65  per  cent,  paid  a  sick-benefit,  similar 
to  the  method  followed  by  the  labor-unions.  No  satisfactory  effort 
seems  to  have  been  made  to  ascertain  the  number  of  employees  pro- 
tected in  the  event  of  sickness  through  some  form  of  voluntary  or  semi- 
voluntary  establishment  organizations.  It  is  said  in  the  report  that 
"From  a  very  hasty  perusal  of  the  answers  to  questions  sent  to  the 
manufacturers  in  representative  cities,  it  seemed  quite  evident  that 
very  few  of  them  provided  any  sort  of  insurance  for  their  employees, 
that  where  they  did,  generally  less  than  half  took  advantage  of  it." 
It  would  seem  that  such  an  exceptionally  important  phase  of  the 
problem  should  not  have  been  dismissed  with  a  "very  hasty"  analysis 
of  the  available  information,  but  that  adequate  and  trustworthy  in- 
formation should  have  been  forthcoming,  if  only  as  a  matter  of  record 
for  use  in  connection  wuth  subsequent  official  or  private  inquiries. 
The  superficial  interest  on  the  part  of  the  commission  in  this  most  im- 
portant aspect  of  their  work  must  be  considered  exceedingly  re- 
grettable. 

The  final  estimate  of  the  so-called  economic  cost  of  sickness,  which 
may  be  assumed  to  mean  the  total  cost  in  the  form  of  money  loss  or 
payments  in  consequence  of  disability  for  work  because  of  sickness  of 
more  or  less  prolonged  duration,  was  placed  in  the  estimate  at  not 
quite  $40,000,000,  or,  to  be  exact,  at  $38,770,167.  This  estimate  was 
based  upon  the  assumption  that  there  were  about  1,507,373  persons 
in  the  State  earning  less  than  $1,200,  and  that  the  estimated  number  of 
days  lost  on  account  of  sickness  would  be  8.5  per  person  per  annum. 
This  estimate,  of  course,  is  merely  a  matter  of  conjecture,  for  the  data 
for  the  State  as  a  whole,  if  available,  might  prove  a  much  lower,  but  in 
all  probability  not  a  much  higher,  proportion  of  days  lost  per  annum  in 
consequence  of  real  sickness  within  a  concise  and  generally  acceptable 
definition  of  the  term.*  Having  thus  first  estimated  the  number  of 
persons  of  ages  eighteen  and  over  gainfully  employed  and  receiving 
less  than  $1,200  per  annum  and  having  then  estimated  the  probable 


♦According  to  an  editorial  in  Modern  Medicine,  of  June.  1919.  on  the  basis  of  recent  studies. 
"The  average  length  of  each  disability  (in  the  United  States)  is  about  thirty-five  days.  Of  the 
6,000,000  who  are  sick,  it  appears  from  the  comprehensive  data  of  the  surveys  that  65  per  cent.,  or 
3,900,000,  are  sick  for  less  than  four  weeks;  19.7  per  cent.,  or  1,182,000,  are  sick  from  four  to  eight 
weeks;  6  per  cent.,  or  360,000,  are  sick  from  eight  to  twelve  weeks;  3  per  cent.,  or  180,000,  are  sick  for 
more  than  six  months;  and  1.3  per  cent.,  or  78,000,  are  sick  for  more  than  a  year."  These  statistics, 
though  largely  a  matter  of  conjecture,  are  at  least  suggestive  of  the  probable  number  of  those  who  may 
be  considered  as  seriously  affected  by  prolonged  sickness.  It  certainly  is  not  going  too  far  to  say  that 
the  number  of  wage-earners  seriously  disabled  by  reason  of  illness,  which  alone  would  involve  the  risk 
of  economic  distress  or  dependency,  is  relatively  small,  considering  our  aggregate  population,  now 
estimated  at  more  than  1 10,000,000. 


39 


number  of  days  lost  on  account  of  sickness  (more  or  less  ill-defined)* 
per  person  per  annum,  the  assumption  continues  by  placing  the  esti- 
mated loss  in  wages  at  $1.80  per  day  for  six-sevenths  of  the  days  pre- 
viously estimated  to  be  lost  on  account  of  sickness  by  the  group,  or 
12,812,670,  would  represent  $19,468,122  per  annum,  which  is  further 
increased  on  account  of  medical  cost,  placed  at  $1.00  a  day,  and  there- 
fore being  for  the  total  number  of  days  lost  $12,812,670.  Now,  of 
course,  the  medical  cost  per  day  might  be  much  more  than  $1.00,  and 
yet  under  contract  it  might  possibly  be  less.  In  addition  to  the  pre- 
ceding estimates  and  conjectures,  the  so-called  economic  loss,  by  which 
is  probably  meant  the  loss  to  other  members  of  the  family,  or  expend- 
itures on  account  of  food,  nursing,  etc.,  is  placed  at  50  cents  per  day, 
making  an  aggregate  of  $6,489,374.  No  one  familiar  with  the  theory  and 
practice  of  the  sickness  branch  of  insurance  is  likely  to  accept  any  of 
the  foregoing  estimates  and  conjectures  as  conclusive  on  so  vital  a 
question  as  the  approximate  cost  to  wage-earners  of  sickness  and  dis- 
ability under  a  well-administered  health-insurance  or  compulsory  sick- 
ness-insurance system  administered  jointly  by  the  employees,  the 
employers  and  the  State. 

Of  interest  also  is  the  report  of  an  investigation  made  by  Dr.  W.  W. 
Walcott  on  the  sickness-insurance  methods  of  fraternal  orders,  almost 
entirely  derived  from  official  reports,  chiefly  records  filed  with  the 
State  Insurance  Department.  It  would  seem  that  such  an  investiga- 
tion should  have  been  made  by  the  Insurance  Department  and  not  by 
a  physician  more  or  less  unfamiliar  with  the  technical  aspects  of  a 
branch  of  insurance  of  exceptional  complexity.  Dr.  Walcott  through- 
out, for  illustration,  refers  to  the  fraternal  orders  as  insurance  com- 
panies, although  any  one  knows  full  well  that  they  do  not  have  the 
legal  status  of  chartered  business  corporations.  For  him  to  say,  for 
illustration,  that  "These  companies  are  composed  chiefly  of  mutual 
benefit  associations,"  is  evidence  of  his  unfamiliarity  with  the  technical 
status  of  these  institutions.  They  are  therefore  interchangeably  re- 
ferred to  as  "companies,"  "associations"  and  "societies."  In  the 
appendix  of  tables,  however,  the  returns  of  life  insurance  companies 
are  included,  although  totally  irrelevant  to  the  subject-matter 
of  the  inquiry.  Some  of  the  details  for  the  more  important 
societies  or  organizations  are  of  interest,  but  it  is  difficult  to  under- 
stand why  the  name  "of  a  large  Pittsburgh  plant  making  electrical 

♦According  to  a  report  made  to  the  County  of  Ayeshire  Insurance  Committee,  based  upon  in- 
vestigations made  by  medical  referees,  the  effect  of  national  health  insurance  in  that  community  has 
been  that  "of  the  persons  who  were  examined  over  39  per  cent,  were  found  fit  for  work,  and  if  those  who 
resumed  work,  rather  than  go  before  the  medical  referee,  be  included,  the  number  who  were  found  fit  was 
increased  to  over  47  per  cent.     In  other  words,  nearly  one-half  of  the  cases  were  found  fit  for  work." 

( National  Insurance  Gazelle,  London,  March  9,  1918.) 

40 


apparatus"  should  not  have  been  given  as  a  matter  of  identification, 
especially  when  the  relief  department  of  this  company  was  considered 
sufficiently  important  to  be  described  in  full  as  to  all  the  minor  pro- 
visions of  administration,  dues,  methods  of  payment,  etc.  The  report 
of  Dr.  Walcott  is  not  a  critical  analysis  of  even  a  single  phase  of  the 
problem  under  consideration,  and  is  useful  merely  on  account  of  some  of 
the  facts,  especially  as  regards  mutual  benefit  associations  transacting 
a  sickness-insurance  business  among  the  foreign-born  population.  A 
large  portion  of  the  report  by  Dr.  Walcott  is  a  reprint  of  data  collected 
by  Dr.  B.  S.  Warren,  at  that  time  in  charge  of  health-insurance  in- 
vestigations for  the  United  States  Public  Health  Service.  It  is  diffi- 
cult to  understand  why  the  Massachusetts  commission  should  not  have 
had  the  time  or  opportunity  to  inquire  with  thoroughness  into  the 
methods  and  results  of  the  sickness-establishment  funds  of  Massa- 
chusetts industries  and  of  Massachusetts  wage-earners,  but  it 
gave  the  preference  in  its  deliberations  to  more  or  less  superficially 
presented  data  concerning  a  number  of  industrial  plants,  or  em- 
ployees connected  therewith,  in  the  Middle  West. 

The  report  of  the  Massachusetts  commission  is  conclusive  evidence 
that  no  real  necessity  for  an  investigation  was  found  to  exist,  that 
neither  the  problem  of  poverty  nor  of  sickness  was  of  paramount  im- 
portance at  the  time  and  that  the  proposed  solution  through  com- 
pulsory health  insurance  had  not  commended  itself  to  the  impartial 
judgment  of  the  majority  of  the  membership  on  such  findings  of  fact 
and  general  inference  as  the  commission  as  a  whole  had  been  able  to 
make. 

Since  the  report  was  issued,  a  new  commission  was  created,  but 
much  the  same  procedure  was  followed  as  in  California.*  The  state- 
ment has  been  made  that  nine  States  have  appointed  commissions  of 
investigation,  with  a  total  appropriation  "of  considerably  above 
$100,000."  The  public  is  of  right  entitled  to  an  adequate  return  for 
the  expenditure  of  so  huge  a  sum,  and  particularly  so  at  a  time  when 
the  first  and  last  duty  of  government  is  to  concentrate  national  energies 
and  national  funds  upon  the  most  efTective  methods  of  reconstruction. 
To  make  useless  investigations  and  to  print  useless  official  reports,  is 
not  to  advance  the  interests  of  wage-earners  and  their  dependents  or 
the  national  welfare  at  large,  but  rather  to  retard  it. 


*For  a  discussion  of  the  Second  Massuchuselts  Report  see  pages  62  et  seq.  and  particularly  page 
68  with  reference  to  the  erroneous  calculations  regarding  the  cost  of  industrial  insurance. 


41 


FIRST   REPORT  OF  TlIIv  COMMONWEALTH  CLUB  OF 
CALIFORNIA,  JUNE,    1917 

In  1917  the  Commonwealth  Club  of  California  arranged  for  a  pub- 
lic discussion  of  compulsory  health  insurance,  with  special  reference  to 
a  proposed  constitutional  amendment.  Every  important  aspect  of 
the  questions  involved  was  subjected  to  critical  and  extended  con- 
sideration. The  speakers  at  the  meeting  represented  the  member- 
ship of  a  committee  on  social  insurance  of  the  club,  appointed  in 
March,  1916,  at  the  request  of  the  state  commission.  In  his  intro- 
ductory remarks  the  chairman  of  the  committee,  Mr.  Ansley  K.  Salz, 
declared  himself  strongly  in  favor  of  social  insurance,  largely  on  the 
ground  that  sickness,  according  to  the  investigation  of  the  State  Com- 
mission on  Social  Insurance,  was  the  principal  cause  of  destitution  in 
California.  The  necessary  expense  on  account  of  sickness,  he  said, 
could  not  be  met  out  of  current  income,  since  it  had  been  found  by  the 
state  commission  that  over  75  per  cent,  of  the  wage-earners  of  the  State 
were  receiving  an  average  income  of  less  than  $1,000  per  annum.  He 
also  accepted  the  statement  made  by  the  commission  that  the  expense 
of  medical  treatment  in  California  was  in  excess  of  the  charges  in  other 
sections  of  the  country,  and  that  the  regular  rate  of  payment  for  med- 
ical services  was  "not  within  the  means  of  a  large  number  of  wage- 
worker^."  To  him,  therefore,  the  only  alternative  was  a  system  of 
compulsory  health  insurance,  including  a  special  tuberculosis  benefit, 
in  view  of  the  fact  that  tuberculosis  was  "the  greatest  single  cause  of 
illness  in  California."  Mr.  Salz  did  not  direct  attention  to  the  fact 
that  a  large  proportion  of  the  cases  of  tuberculosis  in  California  are 
cases  of  the  disease  contracted  in  other  States  and  that  probablv 
one-third  of  the  patients,  if  not  more,  are  not  legally  residents  of 
California,  but  merely  in  the  State  for  the  purpose  of  treatment  and 
cure.  IMr.  Salz  estimated  the  number  of  persons  in  California  who 
would  come  under  the  act  at  about  995,000,  with  an  approximate  pav- 
roll  of  $900,000,000.  He  accepted  the  estimate  of  probable  cost,  placed 
at  4}4  per  cent,  of  the  payroll,  of  which  two-fifths  would  be 
paid  by  employees. 

As  elsewhere  obser\'ed,  all  such  estimates  of  cost  and  pro-rata 
apportionment  are  merely  matters  of  conjecture,  regardless  of  the 
alleged  value  of  the  compulsory  sickness-insurance  experience  of  cer- 
tain foreign  countries,  particularly  the  experiences  of  the  German 

42 


Empire  and  the  city  of  Leipzig.*  Mr,  Salz  was  followed  by  Mr. 
Chester  H.  Rowell,  of  F'resno,  whose  argument  as  a  small  employer 
was  to  the  effect  that  sickness  was  not  merely  the  principal  cause  of 
poverty,  but  also  one  of  the  principal  causes  of  industrial  inefficiency. 
No  evidence,  statistical  or  otherwise,  was,  however,  advanced  in  sup- 
port of  this  allegation.  The  cause  of  poverty  and  dependence  vary 
widely  in  different  sections  of  the  country  and  in  different  strata  of 
industrial  society.  In  some  localities  and  in  some  groups  of  wage- 
workers,  no  doubt  sickness  is,  first,  the  principal  cause  of  unemploy- 
ment, and,  second,  the  principal  cause  of  subsequent  economic 
dependence.  In  many  other  localities  and  sections,  unemployment, 
whether  voluntary  or  involuntary,  is  frequently  the  principal  cause  of 
dependence,  just  as  in  still  others  the  chief  factor  is  intemperance, 
general  shiftlessness,  etc.  But  only  in  small  groups  of  employ- 
ment is  sickness  ever  the  principal  cause  of  industrial  inefficiency,  and 
certainly  no  evidence  has  been  forthcoming  to  contradict  this  view. 

Mr.  Rowell  argued  strongly  in  favor  of  an  amendment  to  the 
constitution,  primarily  because,  in  his  opinion,  compulsory  health  in- 
surance was  approved  of  by  "every  scientific  student  of  the  subject  in 
the  world,"  and  also  by  "all  the  civilized  nations  in  the  world  except 
the  United  States."  Very  serious  exception  must  be  taken  to  this 
statement,  for  qualified  opinion  is  widely  at  variance  in  this  matter, 
and  some  of  the  foremost  authorities  on  insurance  and  related  social 
and  economic  problems  are  decidedly  opposed  to  the  theory  that  the 
solution  of  the  problem  of  poverty  and  its  relation  to  disease  can  be 
brought  about  through  social  insurance  in  any  one  or  all  of  its  various 
forms. 

As  evidence  that  some  of  the  foremost  scientific  minds  of  the 
present  day  are  strongly  opposed  to  compulsory  health  insurance,  the 
following  is  quoted  from  a  treatise  on  "Economics,"  by  President 
Arthur  Twining  Hadley,  of  Yale  University: 

There  are  many  reformers  who  are  anxious  that  other  countries  should 
follow  the  example  of  Germany.  But  the  experiment  has  not  progressed  far 
enough  to  pass  judgment  on  its  success.  In  many  respects  the  gain  to  the  public 
from  a  system  of  this  kind  is  more  apparent  than  real.  The  payment  to  the 
insurance  funds  must  chiefly,  if  not  wholly,  come  out  of  wages.  Even  though 
they  be  nominally  levied  on  the  employer,  he  is  compelled  by  competition  with 
other  employers  who  are  not  subject  to  this  levy  to  reduce  in  corresponding 
degree  the  wages  which  he  pays. 


•See  my  discussion  of  the  "Mortality  and  Morbidity  Experience  of  the  Leipzig  Communal  Sick 
Fund.  1887-1905,"  in  The  Spectator,  of  New  York,  July  14.  1910. 

43 


The  following  additional  extract  is  from  a  treatise  on  the  "Princi- 
ples of  I'conomics,"  by  Professor  F.  W.  Taussig,  of  Harvard  Univer- 
sity, and  also  chairman  of  the  United  States  Tariff  Board: 

A  great  compulsory  system,  in  which  thousands  of  persons  are  insured 
against  sickness,  calls  for  the  most  watchful  management— physicians'  visits 
and  reports,  elaborate  records,  systematic  supervision,  more  or  less  of  red  tape. 
If  badly  administered,  it  is  likely  to  become  demoralizing  to  the  recipients  of 
aid,  and  in  the  end  more  harmful  to  them  than  complete  indifference  and 
abstention  from  aid. 

And,  furthermore: 

A  compulsory  and  universal  system,  with  its  need  of  elaborate  checks  and 
skilful  administration,  is  even  more  out  of  the  question  [for  sickness]  than  it  is 
for  accidents;  at  least  for  any  period  in  the  future  or  for  any  political  and  social 
organization  which  we  can  now  foresee. 

Following  a  thoroughly  critical  and  highly  technical  analysis  of 
the  element  of  cost  m  compulsory  insurance,  and  in  reply  to  the 
question  as  to  "Who  ultimately  bears  the  charges  which  under  such  a 
system  are  first  imposed  on  the  employers?"  Professor  Taussig  con- 
cludes that  "The  outcome  is  likely  to  be  that  the  insurance  charges 
will  ultimately  come  out  of  the  workmen's  ow^n  earnings.  This  will 
take  place,  not  necessarily  by  any  process  of  direct  reductions  in 
wages,  but  more  probably,  in  progressive  countries  like  Germany  and 
England,  by  a  failure  of  wages  to  advance  as  much  as  they  would 
otherwise  do."  Professor  Taussig  amplifies  these  remarks  by  the 
statement  that  "Obviously  it  is  no  objection  to  an  insurance  system 
that  the  premiums  ultimately  came  from  the  beneficiaries  themselves," 
which,  of  course,  is  true,  provided  that  the  workmen  concerned  thor- 
oughly realize  the  fact  and  are  not  acting  under  the  illusion  that  they 
are  paying  only  forty  cents  on  the  dollar.* 

Mr.  Rowell  was  also  in  error  when  he  assumed  that  the  United 
States  of  America  alone  among  the  great  civilized  countries  of  the 
world  is  at  the  present  time  without  a  system  of  compulsory  health 
insurance.  No  such  system  is  in  force  in  England's  great  self-govern- 
ing dominions,  Canada,  Australia,  New  Zealand,  and  South  Africa, 
nor  in  Belgium  and  the  Empire  of  Japan,  nor  in  the  great  republics  of 
South  America — Brazil,  Argentina  and  Chili.  For  Mr.  Rowell  to  argue 
that  "It  should  not  be  impossible  to  wake  up  America  to  be  at  least 

•"The  cost  of  these  insurance  schemes  is  a  substantial  burden  to  the  employing  classes.  Vet, 
in  spite  of  the  increased  cost  which  it  entails,  German  industry  has  not  suffered  in  competition  with 
the  world.  The  system  is  empire-wide,  and  the  contributions  assessed  against  the  employer  are 
passed  on  to  the  cost  of  production  like  any  other  charges.  It  is  also  probably  true  that  the  efficiency 
and  well-being  of  the  working  classes  has  been  so  greatly  improved  that  the  employers  themselves 
have  gained  by  reason  of  insurance."  See  Socialized  Germany,  p.  200.  By  Frederic  C.  Howe.  LL.D.. 
New  York.  1917. 

44 


as  progressive  as  Russia  was  under  the  Czar,"  rather  betrays  his 
misconception  of  the  true  nature  and  purpose  of  any  and  all  so-called 
reform  measures  inaugurated  in  the  former  Russian  Empire  under  the 
ill-starred  leadership  of  the  Romanoffs.* 

With  regard  to  the  probable  cost  of  compulsory  health  insurance, 
Mr.  Rowell  argues,  but  without  statistical  or  other  evidence  to 
substantiate  his  conclusions,  that  "It  will  cost  pretty  nearly  two- 
thirds  as  much  as  it  does  now."  Since  all  the  estimates  as  to  the  true 
cost  of  poverty  and  dependence  in  the  State  of  California  in  conse- 
quence of  sickness,  whether  preventable  or  not,  are  largely  matters  of 
conjecture,  the  statement  that  a  more  or  less  hypothetical  system 
of  compulsory  health  insurance  will  cost  two-thirds  as  much  as  the 
present  burden  is,  of  course,  merely  another  instance  of  guesswork 
opinion.  ~>^ 

Finally,  Mr.  Rowell  asks  the  question  as  to  why  an  employer 
should  pay  for  the  sickness  of  an  employee,  or  his  wife  or  child,  and 
his  reply  is  that  the  reasons  are  the  same  as  those  that  govern  in  the 
rational  administration  of  workmen's  compensation  law.  The  con- 
ditions, of  course,  are  entirely  reversed.  Industrial  accidents  consti- 
tute a  major  portion  of  all  the  accidents  to  which  workmen  are 
liable,  and  the  law  specifically  limits  the  principle  of  compensation 
to  accidents  which  arise  out  of  or  occur  during  the  performance  of 
the  work  for  which  the  employee  is  paid.  No  workmen's  compensa- 
tion law  provides  for  the  accidents  which  occur  in  the  workman's 
family,  or  to  his  wife  or  child,  as-the  case  may  be ;  and  since  practically 
all  the  sickness  to  which  the  average  workman  is  liable  occurs  outside 
of  his  employment,  it  has  absolutely  no  directly  determinable  relation 
thereto.  In  so  far  as  any  given  industry  is  subject  to  specific  indus- 
trial diseases  they  should  certainly  be  compensated  for,  and  in  the 
most  liberal  manner  under  an  Occupational  Disease  Compensation  Act. 
But  to  charge  the  employer  with  the  pecuniary  consequences  of  sick- 
ness due  largely,  if  not  entirely,  to  conditions  outside  of  the  employ- 
ment, primarily,  of  course,  in  consequence  of  failure  in  matters  of 
personal  or  public  hygiene,  would  seem  to  be  contrary  to  every 
sound  principle  of  public  policy  in  a  democracy. 

Mr.  George  B.  Scott  in  his  remarks,  following  those  of  Mr.  Rowell, 
and  also  representing  the  viewpoint  of  the  employer,  directed  attention 
to  the  fact  that  the  investigation  of  the  state  commission  disclosed  that 
the  average  loss  of  working-time  on  account  of  sickness  in  the  Bay 
Cities  of  California  was  only  2.9  days  per  annum,  and  that  out  of 
1,200  working  men  whose  records  were  examined  almost  one-fourth  of 

*In  France  sickness  insurance  applies  only  to  a  small  fraction  of  wage-earners. 

45 


the  entire  amouiil  of  sickness  was  lost  by  only  ten  men.  To  establish 
ii  social- insurance  system  upon  such  superficial  and  self-contradictory 
conclusions  would  clearly,  in  the  words  of  Mr.  Scott,  constitute 
"social  injustice." 

Representing  the  vState  P'ederation  of  Labor,  Mr.  Daniel  C. 
Murphy,  its  president, (argued  strongly  against  the  principle  of  com- 
pulsion, while  giving  otherwise  his  approval  to  the  general  theory  of 
social  insurance  on  a  voluntary  plan.  Since  the  principle  of  com- 
pulsion is  inherent  in  every  system  of  social  insurance,  Mr.  Murphy's 
objections  are  clearly  opposed  to  the  conclusions  of  the  state  com- 
mission. In  quoting  from  an  address  by  Professor  Irving  Fisher  with 
reference  to  the  frequently  asserted  fallacy  that  "Under  the  com- 
pulsory system  there  could  be  no  lapses,"  the  fact  is  ignored  that 
lapses  would  be  as  common,  if  not  more  so,  under  compulsory  insurance 
as  under  voluntary  insurance,  for  in  either  system  the  insurance  pro- 
tection is  unconditionally  determined  by  the  payment  of  contributions, 
except  in  so  far  as  these  are  modified  by  a  period  of  grace  of  relatively 
short  duration,  and  forfeited  contributions  are  probably  as  common  in 
compulsory  insurance  as  in  voluntary  insurance,  but  in  contrast  to 
the  latter  there  are  no  paid-up  or  cash-surrender  values  or  mortuary 
dividends  of  any  kind. 

In  the  same  quotation  from  an  address  by  Professor  Fisher,  Mr. 
Murphy  recalls  the  argument  that  "Just  as  employers  have  installed 
safeguards  for  dangerous  machinery,  in  order  to  reduce  the  cost  of 
workmen's  compensation,  so  in  order  to  reduce  the  cost  of  health  in- 
surance they  will  supply,  for  instance,  better  sanitation,  ventilation 
and  lighting,  more  physiological  hours  of  labor  and  fuller  consideration 
for  the  special  needs  of  women  and  children."  Professor  Fisher  en- 
tirely overlooked  the  fact  that,  w^hile  in  the  case  of  industrial  accidents 
cause  and  efTect  are  so  clearly  related  to  each  other  in  the  large 
majority  of  occurrences  that  the  installation  of  safeguards  in  so  far  as 
they  are  practicable  is  a  foregone  conclusion,  the  relation  of  sanitation, 
ventilation,  lighting,  excessive  hours  of  labor,  etc.,  to  the  cost  of  health 
insurance  is  so  exceedingly  remote  as  regards  cause  and  effect  that  no 
employer  of  labor,  on  general  principles,  would  seriously  concern 
himself  with  these  questions  on  that  ground,  and,  as  a  matter  of  actual 
experience,  this  has  precisely  been  the  experience  under  social  insurance 
in  foreign  countries.  There  has  been  no  special  or  determined  effort 
on  the  part  of  employers  abroad  to  improve  general  sanitation,  or  even 
factory  ventilation  and  lighting,  or  to  reduce  the  hours  of  labor,  etc., 
for  the  purpose  of  reducing  the  occurrence  of  sickness,  or,  more  pre- 


46 


cisely,  the  cost  therefor  to  the  employer  and  to  the  industry  directly 
concerned.  Such  general  arguments  are  the  most  striking  evidence 
of  the  recklessness  of  the  propaganda  in  behalf  of  compulsory  health 
insurance  and  of  the  utter  disregard  of  the  truly  momentous  con- 
sequences to  labor  and  industry  involved  in  purely  speculative  pro- 
posals for  pseudo-social  reforms. 

Mr.  James  W.Mullen,  editor  of  the  Labor  Clarion,  of  San  Francisco, 
declared  himself  as  strongly  opposed  to  comptdsory  social  insurance. 
With  a  better  insight  into  the  actual  facts  of  the  problem,  Mr.  Mullen 
directed  attention  to  the  bitter  truth  of  European  experience,  that 
''the  persons  who  most  need  insurance  of  this  kind  will  be  absolutely  left 
out  of  consideration  when  the  scheme  is  put  into  operation"  for,  he  ob- 
served, the  casual  laborer  when  he  is  out  of  work  will  not  be  able  to 
pay  his  contribution  and  he  will  therefore  not  be  entitled  to  any  bene- 
fits unless  the  legislature  should  provide  that  during  a  period  of  unem- 
ployment he  may  pay  both  his  proportion  of  the  preminyn  and  that  of  his 
employer,  but  in  that  case  this  particular  group  of  workers  would  be 
called  upon  to  pay  double  contributions  when  least  in  a  position  to  do 
so.  That,  of  course,  would  in  a  large  majority  of  cases  result  in  for- 
feiture, or,  as  the  term  is  more  generally  used,  in  the  lapsing  of  interest, 
rights  and  privileges  in  the  fund  established  ostensibly  solely  for  his 
protection. 

From  quite  another  point  of  view  a  strong  argument  in  favor  of  the 
adoption  of  the  amendment  was  presented  by  Mr.  Warren  H.  Pills- 
bury,  referee  of  the  State  Industrial  Accident  "Commission.  In  the 
opinion  of  Mr.  Pillsbury  a  system  of  compulsory  health  insurance 
would  unquestionably  reduce  taxation,  although  the  experience  of 
every  foreign  country  in  which  such  a  system  has  been  in  existence  for 
a  number  of  years  is  quite  to  the  contrary.  His  argument  that  there 
would  be  an  increase  in  industrial  efficiency  in  consequence  of  a  reduc- 
tion in  the  number  of  working  days  lost  on  account  of  sickness  per 
annum  is  also  opposed  by  the  facts  of  experience,  in  that  in  every 
European  country  at  least  the  average  duration  of  compensated  sick- 
ness has  steadily  increased,  which,  of  course,  is  equivalent  to  a  material 
loss  in  productive  efficiency.  Mr.  Pillsbury  might  have  asked  himself 
the  question  as  to  what  the  situation  would  be  if  the  same  conditions 
were  to  develop  in  the  State  of  California  as  prevailed  in  the  city  of 
Leipzig  during  IQIS.*  According  to  a  statement  presented  in  connec- 
tion with  the  discussion  by  Mr.  Salz,  the  chairman  of  the  Committee 
on  Social  Insurance,  that  fund  in  1913  had  a  membership  of  208,000, 

♦See  my  address:     "The  Failure  of  Cernian  Compulsory  Healtli  Insurance — A  War  Revelation 
Association  of  Life  Insurance  Presidents.  New  V'ork,  1918. 

47 


anions  whom  there  were  90,500  cases  of  sickness,  involving  a  loss  of 
2,540,000  days  of  labor  time,  or  nearly  twelve  days  per  member  per 
annum,  against  less  than  three  days  per  annum  of  the  labor-organiza- 
tions investigated  by  the  Social  Insurance  Commission  of  California. 
In  1013,  according  to  the  official  report  of  the  Leipzig  Communal  Sick 
!■  und,  the  number  of  cases  of  sickness  among  the  male  members  in  the 
compulsory  section  of  the  fund  was  41.5  per  cent,  of  the  membership. 
1' ithcr  the  health  conditions  of  the  city  of  Leipzig  are  extremely  un- 
favorable, regardless  of  more  than  thirty  years  of  compulsory  sickness- 
insurance  experience,  or,  as  is  more  likely,  malingering  is  the  rule, 
rather  than  the  exception,  and  particularly  so  during  prolonged  periods 
of  unemployment.*  To  argue,  therefore,  that  compulsory  sickness 
insurance  would  increase  industrial  efficiency  by  reducing  the  time 
loss  in  consequence  of  sickness  is  to  ignore  the  most  conclusive  experi- 
ence of  the  fund  or  institution  deservedly  referred  to  as  a  model  of 
its  kind  in  the  late  German  Empire  available  for  the  purpose. 

In  continuation  of  his  argument  for  the  amendment,  the  view  of 
Mr.  Pillsbury  regarding  the  anticipated  direct  financial  saving  to  the 
taxpayer  was  summarized  as  follows: 

(1)  He  assumes  a  decreased  expense  on  account  of  the  maintenance 
of  state  and  county  hospitals,  due  to  the  wage-earner  being  provided 
with  means  for  paying  for  his  treatment.  Since  the  present  provisions 
for  hospital  treatment  are  far  from  adequate  and  since  the  wage-earners 
utilize  such  institutions  to  but  a  very  limited  extent,  it  is  a  practical 
certainty  that  the  public  outlays  on  account  thereof  will  be  decidedly 
increased,  as  they  ought  to  be,  but  for  other  reasons  than  compulsory 
health  insurance. 

(2)  Mr.  Pillsbury  expects  a  decreased  expense  for  county  and  city 
poor-relief.  No  evidence  has  been  forthcoming  to  prove  that  the 
group  of  wage-earners  who  would  be  directly  affected  by  health  in- 
surance are  at  the  present  time  a  material  expense  to  the  city  or  county 
of  poor-relief  in  consequence  of  prolonged  illness.f  There  are,  there- 
fore, no  reasons  whatever  for  anticipating  a  decreased  expense,  and 
more  so  in  view  of  the  fact  that  under  no  compulsory  health  insurance 
at  present  in  existence  are  the  very  poor  properly  and  effectively  pro- 

*lt  has  been  the  invariable  experience  under  Social  Insurance  that  claims  for  sick  benefit  increase 
during  prolonged  periods  of  unemployment.  This  conclusion  is  fully  confirmed  by  more  than  thirty 
years  of  Gernian  experience,  but  particularly  since  the  outbreak  of  the  war. 

iTheie  can  be  no  more  serious  error  than  to  assume  that  social  insurance  is  the  solution  of  the 
problem  of  pauperism  and  poverty.  Of  course,  if  its  terms  are  used  in  a  dubious  or  doubtful  sense  it  is 
easy  to  mislead  oneself  and  the  public.  A  universal  non-contributory  old-age  pension  is  no  more  or 
no  less  than  outdoor  relief  under  another  name.  According  to  a  letter  from  the  Scottish  Legal  Health 
Assurance  Approved  Society,  the  poor-law  guardians  'have  encouraged  people  to  make  provision  for 
sickness  by  joining  insurance  societies,"  but  they  are  -'annoyed  when  a  claim  should  be  made  for  poor- 

48 


vided  for.  But  it,  of  course,  would  be  quite  immaterial  whether  poor- 
relief  was  paid  out  by  the  State  or  the  county  in  the  form  of  sickness 
insurance,  for  both  medical  attendance  and  pecuniary  benefits,  or 
directly  in  the  form  of  family  support  for  the  same  purposes.  Advo- 
cates of  compulsory  health  insurance  persistently  ignore  the  fact  that 
the  real  problem  of  the  poor  lies  in  the  inadequacy  of  the  family  income, 
or,  in  other  words,  low  wages  and  precarious  employment.  Neither 
of  these  wants  is  removed  by  compulsory  health  insurance,  which,  how- 
ever, in  many  instances  no  doubt  encourages  chronic  pauperism,  rather 
than  tends  to  prevent  it.  In  no  country  in  which  social  insurance 
has  been  in  operation  for  many  years  has  there  been  a  material  re- 
duction in  pauperism  accurately  and  properly  ascertained.* 

(3)  Mr.  Pillsbury  anticipates  a  decrease  to  the  State  in  the  cost 
of  maintenance  of  insane  asylums,  prisons  and  reformatories,  due  to 
the  stoppage  at  the  source  of  evils  due  to  premature  breaking-up  of 
the  family  by  the  loss  of  the  earning  capacity  of  the  wage-earner. 
In  so  far  as  these  indicated  sources  of  insanity  and  crime  are  due  to 
the  causes  stated  they  are  practically  without  remedy  under  any 
existing  system  of  health  insurance.  There  are  no  reasons  whatever, 
for  supposing,  however,  that  the  expenses  of  maintenance  of  asylums, 
prisons  and  reformatories  would  be  perceptibly  decreased  under  even 
the  most  efficient  and  drastic  system  of  health  insurance.  Certainly 
no  such  relation  of  social  insurance  to  insanity  and  crime  has  been 
proved  to  exist  in  foreign  countries  in  which  social  insurance  has  been 
in  operation  for  many  years. 


relief."  It  is  properly  pointed  out  in  this  connection  "that  the  Insurance  Act  was  not  instituted  for 
the  purpose  of  relieving  the  Poor  Law  authorities  of  their  responsibilities."  To  much  the  same  effect 
is  the  statement  by  Lord  Balfour  made  in  the  House  of  Lords  on  January  29,  1919,  referring  to  "what 
is  really  a  great  scandal,  and  not  only  a  scandal  in  itselt.  but  a  very  grave  waste  of  pul)lic  money  " 
His  Lordship  directed  attention  to  the  fact  tliat  "Insured  persons  often  take  advantage  of  poor-law  and 
public  institutions."  Referring  to  statistics  of  1918  for  Edinburgli.  Glasgow,  and  Goven,  Lord  Balfour 
said  that  "In  Ivdinburgh  nearly  a  thousand  people  in  the  year  have  got  this  benefit  wrongfully,  as  I 
think,  and  in  Glasgow  nearly  ten  thousand  people  received  this  insurance  benefit,  having  been  sup- 
ported in  poor-law  institutions  during  illness." 

♦Referring  to  the  lot  of  the  deposit-contributors,  which  represents  many  of  the  poorest  poor  or 
those  most  urgently  in  need  of  material  assistance  during  illness  and  adequate  i7iedical  treatment 
necessary  to  restore  impaired  earning  capacity,  it  is  said,  in  the  special  supplement  on  the  Working  of 
the  Ins-urance  Act.  March  14,  1914,  of  the  New  Slalesman.  London,  that  "Wliat  the  Deposit  Contributor 
gets  for  the  weekly  fourpcnce  (or  threepence)  abstracted  from  wages  is  little  enough.  After  nine  shil- 
lings has  been  debited  to  him  for  doctoring  and  administrative  expenses  there  is  seldom  enough  to  his 
credit  to  permit  of  more  than  a  week  or  two's  Sickness  Benefit,  so  that  no  effective  provision  is  made 
for  the  time  of  ill-health.  The  wives  of  the  Deposit  Contributors,  in  whose  children  the  Stale  has  as 
much  interest  as  in  other  babies,  can  practically  never  get  Maternity  Benefit.  When  they  break  down 
there  will  practically  never  be  anything  for  Disablement  Benefit.  And,  so  far  as  wecan  learn,  many 
of  them  often  because  of  the  migratory  character  of  their  work,  seem  not  to  have  got  on  tlie  panel 
doctors'  lists,  with  the  result  that  they  are  often  not  getting  Medical  Benefit.  Unless  they  start  with 
nine  shillings  to  their  credit  at  the  commencement  of  the  year,  they  have  no  right  throughout  the 
whole  year  to  draw  anything  whatsoever,  unless  the  Insurance  Committee  chooses  to  permit  if.  though 
their  contributions  are  being  taken  from  them  week  by  week!" 

49 


(4)  As  a  source  of  saving  to  the  taxpayer  it  is  assumed  that  mere 
would  be  a  reduction  in  the  expenditures  for  public  charity  and  benevo- 
lent associations.  All  this  is  simply  a  matter  of  pure  conjecture. 
To  a  large  extent  the  problem  of  charity  is  one  of  family  rather  than  of 
individual  support.  The  predominating  causes  of  charity  and  de- 
pendence have  very  little  to  do  with  sickness  on  the  part  of  the  normal 
wage-earner.  Prolonged  sickness  in  the  family  no  doubt  often  proves 
the  cause  of  a  complete  breakdown,  making  outside  help  imperatively 
necessary;  but  unless  the  proposed  system  of  compulsory  health  insur- 
ance adequately  and  liberally  provides  for  the  medical  care  of  the 
entire  family,  the  outlook  is  practically  hopeless  that  material  gains 
will  result  in  the  direction  indicated. 

Mr.  Pillsbury  assumes  a  number  of  other  indirect  economic  gains, 
but  all  of  his  assumptions  are  merely  based  upon  superficial  considera- 
tion. Any  one,  of  course,  may  assume  what  he  pleases  in  a  matter 
of  this  kind  in  so  far  as  his  own  interests  are  concerned,  but  reckless 
guesswork  opinion  becomes  a  serious  menace  to  the  public  welfare 
when  applied  to  public  measures  of  so  far-reaching  a  nature  as  com- 
pulsory health  insurance. 

In  concluding  the  discussion  IMr.  David  Atkins,  of  San  Francisco, 
argued  strongly  against  the  proposed  amendment  from  the  standpoint 
of  the  taxpayer.  In  the  words  of  Mr.  Atkins,  the  proposed  legislation 
"strikes  one  more  blow  at  self-dependence  and  initiative  and  makes 
your  citizen  a  subject,  whether  of  king  or  of  commission  matters  lit- 
tle. Self-dependence  and  initiative,  virtues  only  permitted  to  a  few 
favored  individuals  in  older  forms  of  government,  are  again  to  be  taken 
away  from  a  large  number  of  citizens,  in  return  for  a  mess  of  pottage, 
and  the  normal  cycle  of  human  stupidity  becomes  obvious.  The 
Constitution  promised  liberty  and  happiness,  not  supervision  and 
comfort;  that  is,  the  guarantees  were  moral,  not  material." 

The  discussion  of  social  insurance  before  the  Commonwealth  Club 
of  California  disclosed  a  wide  range  in  ihe  prevailing  viewpoints. 
Every  essential  phase  of  the  question  was  subjected  to  critical  con- 
sideration, but  the  discussion  makes  evident  much  confusion  of  thought 
on  matters  of  fact  and  correct  inference.  Conceived  as  a  social  solu- 
tion the  abstract  principle  of  health  insurance  no  doubt  appeals 
strongly  to  those  eager  to  bring  about  a  more  satisfactory  system  of 
care  in  the  event  of  illness  in  the  families  of  the  poor.  Bv  accepting 
the  statement  that  the  predominating  cause  of  public  dependence  is 
to  be  found  in  sickness  and  its  economic  consequences,  those  in  favor 
of  the  adoption  of  the  amendment  overlooked  the  fact  that  the  solution 
would  lie  in  the  direction  of  higher  wages  and  better  conditions  of 

50 


living,  rather  than  in  a  method  at  best  but  one  of  amelioration  and 
precarious  relief.  It  requires  no  argument  to  sustain  the  conviction 
that  low  wages  and  sickness  occur  frequently  together,  and  obviously 
the  former  may  as  readily  be  the  cause  of  the  latter  as  vice  versa. 
Persons  in  chronic  ill  health  can  no  more  command  high  average 
wages  and  continuity  of  employment  than  can  the  very  poor  secure 
the  best  possible  medical  and  surgical  attendance,  proper  environ- 
mental conditions  predisposing  to  good  health  and  exceptional  long- 
evity. The  British  experience  has  conclusively  shown  that  health 
insurance  rather  tends  to  perpetuate  chronic  pauperism  or  economic 
dependence,  in  consequence  of  a  low  social  status,  under  which  the 
social  circumstances  during  sickness  are  really  superior  to  those 
common  to  the  every-day  life  of  the  individual  while  at  work.*  In 
the  case  of  women  insured  under  British  national  health  insurance 
acts,  the  income  provided  in  the  event  of  sickness  is  within  a  few 
shillings  of  the  average  amount  normally  earned,  and,  as  observed 
by  Sir  John  Collie,  "There  is  therefore  very  little  inducement  for 
them  to  disregard  the  minor  ailments,  but  rather  an  encouragement 
to  a-vail  themselves  of  their  anemic  or  other  conditions  in  order  to 
obtain  a  temporary  respite  from  the  hardship  of  daily  toil."  Re- 
ferring to  the  effects  of  the  health-insurance  act  in  general,  Sir  John 
Collie  further  remarks  that  on  the  basis  of  available  statistics  it  is 
self-evident  "that  thousands  of  employees  who  should  be  at  work 
successfully  claim  sick-pay."  He  frames  a  strong  indictment  of  in- 
difference and  neglect  on  the  "part  of  the  medical  profession  in  raising 
the  question  as  to  whether  the  profession  is  doing  its  duty  and  whether 
"a  serious  and  painstaking  effort  is  being  made  by  the  profession  to 
make  a  stand  against  the  conscious  or  unconscious  exaggeration  of 
symptoms  and  the  unnecessary  prolongation  of  sick-leave  by  working 
men."  He  argues  that  the  statistics  of  the  Home  Office  "prove 
conclusively  that  things  are  rapidly  going  from  bad  to  worse,  and  that 
it  is  difficult  to  escape  from  the  conclusion  that  in  this  respect  the 
medical  profession  has  been  'weighed  in  the  balance  and  found  want- 
ing.' "  He  even  goes  further  in  pointing  out  that  "the  morale  of  the 
workshops  suffers  enormously  as  a  result  of  the  laxity  engendered 
by  the  unnecessarily  prolonged  suspension  of  the  beneficent  disci- 

♦There  never  was  a  more  urgent  need  ot  clear  and  rigorous  thinking  than  to-day.  The  misuse  of 
long-established  terms  for  propaganda  purposes  has  become  the  rule  rather  than  the  exception.  It  is  a 
deliberate  delusion  of  the  public  to  convey  that  non-contributory  old-age  pensions,  for  illustration,  are 
anything  but  poor-law  outdoor  relief  in  disguise.  As  said  by  Professor  A.  V.  Dicey  in  his  Harvard 
lecture  on  "Law  and  Opinion  in  Kngland."  "The  Old  Age  Pension  Act  is  the  bestowal  by  the  State  of 
pecuniary  aid  upon  one  particular  class  of  the  community,  namely,  the  poorer  clas?  of  wage-e.arners. 
It  is  in  essence  nothing  but  a  new  form  of  outdoor  relief  for  the  poor.  Surely  a  sensible  and  benevolent 
man  may  well  .ask  himself  whether  England  as  a  whole  will  gain  by  enacting  that  the  receipt  of  poor 
relief,  in  the  shape  of  a  pension,  shall  be  consistent  with  the  pensioner's  retaining  the  right  to  join  in 
the  election  of  a  Member  of  Parliament." 

51 


pliiie  which  altciition  to  one's  business  entails."  He  offers  as  a 
su>;gestion  the  experience  of  the  South  Metropolitan  Gas  Company, 
which  is  mana^'cd  on  the  basis  of  a  copartnership  and  in  which  the 
participation  of  the  working  men  and  their  own  direct  pecuniary 
interest  have  resulted  in  avoiding  the  evils  of  malingering  otherwise 
so  common  throughout  British  industry.  Sir  John  Collie  refers  to 
evidence  collected  by  a  departmental  committee,  resulting  in  the 
recommendation  that  "immediate  steps  should  be  taken  to  produce  a 
firmer  attitude  on  the  part  of  the  medical  profession  with  regard  to 
improper  claims  for  sickness-benefit."  As  a  solution  it  was  recom- 
mended that  "independent  medical  referees  be  appointed  to  pass 
upon  doubtful  claims."  But  aside  from  the  question  that  the  re- 
quired medical  staff  would  not,  on  account  of  the  then  existing  war, 
have  been  available,  it  may  be  questioned  whether  the  problem  would 
have  been  successfully  solved,  unless  such  referees  were  given 
practically  arbitrary  powers  of  inquiry,  including  the  personal  exami- 
nation of  the  insured,  etc.,  for  no  doubt,  the  most  strenuous  objections 
would  be  raised  against  such  a  practice  by  the  British  wage-earners 
as  a  wrongful  interference  with  the  liberty  of  the  subject*. 

♦Under  any  and  every  system  of  social  insurance  the  development  of  autocratic  and  arbitrary 
methods  of  interference  with  personal  rights  and  liberties  is  a  foregone  conclusion.  As  a  protection 
against  malingering  and  fraud,  the  employment  of  numerous  inspectors,  supervisors  and  examiners  is. 
however,  absolutely  necessary.      (See  also  footnote  on  page  40.' 


52 


REPORT  ON  HEALTH  INSURANCE  BY  THE  NEW  JERSEY 

COMMISSION  ON   OLD  AGE,   INSURANCE  AND 

PENSIONS,  NOVEMBER,   1917* 

Compulsory  health  insurance  is  a  subject  which  demands  the  most 
thoughtful  consideration  of  all  who  have  the  best  interests  of  the 
State  and  the  nation  at  heart.  The  one-sided  propaganda  for  its 
adoption  on  the  part  of  the  several  States  has  unfortunately  com- 
plicated the  situation  considerably,  and  many  have  come  forward  as 
authorities  on  health  insurance  who  have  no  qualifications  for  the 
expression  of  an  expert  opinion  in  this  field.  The  same  conclusion 
applies  also,  unfortunately,  to  some  of  those  who  have  presented 
reports  of  social-insurance  commissions,  particularly  of  the  States 
of  California  and  New  Jersey.  The  New  Jersey  report  on 
Health  Insurance  to  the  Governor  of  the  State,  dated  November, 
1917,  is  a  lamentable  exhibit  of  guesswork,  bias  and  indifference  to 
facts.  It  is  not  a  document  which  reflects  the  wisdom  or  the  judgment 
of  the  intelligent  people  of  the  State  of  New  Jersey  on  a  question  which 
demands  the  fullest  and  most  impartial  consideration. 

The  questions  involved  cannot  be  disposed  of  by  platitudes  and 
guesswork  opinion.  It  is  absurd  for  the  commission  to  argue  such  a 
question  as  to  whether  "we  are  to  survive  as  a  nation,"  for  it  cannot 
have  any  relation  whatever  to  the  adoption  or  the  non-adoption  of 
compulsory  health  insurance.  It  is  equally  absurd  for  the  commission 
to  argue  that  a  "national  emergency  exists  as  regards  the  adequate 
health  protection  of  our  people."  Leaving  out  of  consideration  the 
influenza  epidemic  of  last  year  and  the  epidemic  of  infantile  paralysis 
of  two  years  ago,  it  may  safely  be  asserted  that  this  nation  has  never 
been  as  healthy  during  any  time  in  the  past  as  during  recent  years,  f 

The  report  neither  indicates  nor  reflects  analysis  and  thoroughness 
of  research.  There  is  no  presentation  of  any  governing  facts  which 
bear  directly  upon  the  health  and  physical  welfare  of  the  people  of 
New  Jersey.  It  is  absurd  for  such  a  commission  to  present  a  mis- 
leading statement  from  one  who  is  not  an  authority  on  public  health 
or  army  medical  rejections  to  the  effect  that  of  the  men  examined  for 

•This  section  was  originally  printed  in  The  Spectator,  July  24,  1919. 

tDuring  the  week  of  June  14th,  1919,  the  general  death  rate  of  46  American  cities,  according  to 
the  official  returns  of  the  Division  of  Vital  Statistics  of  the  United  States  Bureau  of  the  Census,  was 
only  12.0  per  1.000.  The  mortality  of  infants  (ages  under  1  year)  was  only  74.0  per  1,000.  It  may  be 
questioned  whether  any  other  country  in  the  world  can  exhibit  a  similar  record  of  favorable  mortality 
experience. 

53 


I  lie  army  and  the  navy  the  rejection  rate  was  66  per  cent.  According 
to  Major  Crowder's  first  ofiicial  report  on  the  subject  the  ratio  of 
rejections  was  33  per  cent.,  but  this  rejection  rate,  as  I  have  made 
clear  in  my  address  on  "Army  Anthropometry  and  Medical  Rejection 
Statistics,"  is  not  to  be  construed  in  any  sense  as  conclusive  evidence 
regarding  the  physical  decrepitude  or  the  deterioration  of  the  American 
people.  Large  numbers  of  men  were  rejected  for  military  reasons  and 
according  to  antiquated  rules  who  were  thoroughly  lit  material  for 
fighting  purposes  as  well  as  for  the  needs  of  industrial  life.  Many 
men  were  rejected  for  short  stature,  which  is  not  pathological,  and  for 
deficiency  in  chest  expansion,  which  likewise  could  not  be  construed 
as  evidence  of  disease.  Men  were  rejected  for  fiat-foot,  spinal  cur- 
vature, visual  defects,  and  most  of  all  for  dental  deficiencies  only 
remotely  bearing  upon  the  question  of  health  and  physical  well-being. 
But  whatever  the  facts  are  with  reference  to  army  rejections,  the 
people  of  the  State  of  New  Jersey  have  a  right  to  be  correctly  informed. 

If  "available  information  indicates  that  New  Jersey  cannot  consider 
her  health  conditions  satisfactory,"  the  commission  presents  no  such 
evidence,  nor  is  it  available  through  any  published  sources.  The 
official  reports  of  the  State  Board  of  Health  indicate  reasonably  satis- 
factory conditions,  and  a  material  decline  in  the  death  rate  during 
recent  years.  To  attempt  to  substantiate  such  a  statement  by  an- 
tiquated life  tables  constructed  by  methods  more  or  less  unknown  and 
probably  not  comparable  with  modern  methods  of  life-table  construc- 
tion is  merely  another  attempt  to  mislead  the  public.  If  the  health 
conditions  of  New  Jersey  are  not  satisfactory  and  if  the  State  Board  of 
Health  is  not  organized  as  it  should  be,  the  commission  offers  no  solu- 
tion of  a  problem  properly  entitled  to  most  serious  concern. 

The  statement  is  made  that  "the  potteries,  smelters,  tanneries, 
textile  and  hatting  trades  of  New  Jersey  tell  a  tale  not  only  of  lead- 
poisoning,  mercurial  poisoning,  and  well-known  occupational  diseases, 
but  also  of  consumption,  pneumonia,  and  kindred  ailments  induced  by 
work  in  dust  or  in  humid  atmosphere."  According  to  a  statement  on 
a  subsequent  page,  presenting  the  statistics  of  the  Bureau  of  Asso- 
ciated Charities  of  Newark,  out  of  1,412  cases  considered  during  1916, 
only  four  represented  occupational  diseases,  and  172  represented 
tuberculosis.  There  is  no  evidence  extant  which  proves  that  occu- 
pational diseases  are  unduly  common  in  the  State  of  New  Jersey,  but, 
quite  to  the  contrary,  evidence  is  available  to  prove  lead-poisoning  in 
the  potteries  and  mercurial  poisoning  in  the  hat  factories  of  rare  occur- 
rence at  the  present  time  in  contrast  to  a  relatively  high  rate  of 
frequency  in  former  years.     To  substantiate  such  a  statement  by  a 

54 


table  of  mortality  from  consumption  derived  from  general  experience 
may  also  be  very  seriously  misleading.  The  commission  made  no 
original  inquiry  into  the  facts  concerning  New  Jersey,  but  relied  entirely 
upon  material  readily  available  through  public  sources.  There  are 
no  reasons  for  supposing  that  tuberculosis  in  the  industries  of  New 
Jersey  is  unduly  excessive;  quite  to  the  contrary,  in  all  probability  the 
incidence  of  tuberculosis  is  now  much  less  than  in  former  years. 

The  New  Jersey  Commission  on  Social  Insurance  states  that  "a 
special  report  by  the  New  Jersey  Department  of  Labor  on  the  felt  hat 
industry  mentions  hazards  of  mercurial  poisoning,  tuberculosis  of  the 
lungs,  humidity  and  bad  sanitation  in  almost  every  department  of 
the  industry."  As  a  matter  of  fact  there  is  no  comparison  between  the 
felt-hat  industry  of  to-day  and  the  truly  appalling  health  conditions 
of  that  trade  twenty  and  thirty  years  ago. 

If  tuberculosis  remains  as  an  insidious  foe  to  wage-earners'  lives,  it 
is  largely  because  there  has  not  been  the  progress  in  public-health 
organization  required  by  modern  industrial  needs.  Industrial  dust  is 
unquestionably  a  dangerous  factor  and  the  cause  of  many  preventable 
deaths;  but  no  State  department  of  health  has  concerned  itself  as 
thoroughly  with  this  question  as  the  needs  of  the  situation  demand. 
In  spite  of  this,  however,  greater  progress  in  this  respect  has  been  made 
in  the  United  States  than  in  any  country  abroad  in  which  social  insur- 
ance has  been  universally  adopted.  The  progress  which  has  been 
achieved  is  due  to  the  broad-minded  viewpoint  of  modern  manu- 
facturers, chiefly  of  large  industries,  who  recognized  the  importance  of 
safety  and  sanitation,  as  best  illustrated  by  the  extraordinary  results 
achieved  by  the  United  States  Steel  Corporation. 

The  reference  to  life  insurance  practice  is  only  half  true.  The 
most  important  operators,  such  as  curlers,  finishers,  flangers,  in- 
spectors, packers,  shavers  and  stiffeners,  are  now  accepted  at  regular 
rates;  blockers,  blowers,  coners,  dryers,  feeders,  hardeners,  mixers, 
pouncers,  singers,  trimmers,  weighers  and  wetters  are  accepted  at 
medium  rates;  and  only  the  operators  most  exposed  to  dust  inhalation, 
and  as  to  which  there  has  been  no  qualified  inquiry  for  remedial 
purposes  by  either  the  State  Board  of  Health  or  the  State  Department 
of  Labor,  namely,  fur  cutters,  makers  and  sizers,  who  constitute  but  a 
small  fraction  of  the  total  number  employed  in  the  felt-hat  industry, 
are  declined.  It  may  be  said  in  this  connection  that  few  States  in  the 
United  States  have  developed  a  more  active  interest  on  the  part  of  the 
vState  Department  of  Labor  in  industrial  hygiene  than  the  vState  of 
New  Jersey,  and  the  rules  and  regulations  which  have  been  promul- 
gated and  become  effective  are  among  the  most  conclusive  evidences  of 

55 


a  true  and  lasting  sanitary  progress  in  New  Jersey  industries.  Fur- 
ther progress  is  required,  and  will  be  attained,  more  so  in  view  of  the 
fact  that  an  Occupational  Disease  Clinic  is  now  in  course  of  develop- 
ment in  the  city  of  Newark,  and  that  a  Museum  of  Safety  and  Indus- 
trial Sanitation  is  being  established  by  the  Labor  Department  in  Jersey 
City. 

The  New  Jersey  Commission  presents  no  facts  tending  to  show 
that  for  its  insurance  data  it  relied  upon  the  advice  of  the  Insurance 
Department.  The  statement,  for  illustration,  that  "for  every  dollar 
that  one  of  the  largest  New  Jersey  life  insurance  companies  paid  out 
to  its  industrial  policyholders,  it  expended  seventy-five  cents  on  over- 
head and  administration,"  is  grotesquely  at  variance  with  the  facts. 
The  New  Jersey  Commission  on  Social  Insurance  was  not  concerned 
with  industrial  insurance  at  all,  and  the  statement  is  therefore  gratu- 
itous and  merely  evidence  of  the  socialistic  bias  of  the  members  of  the 
commission,  who  miss  no  opportunity  for  assailing  the  existing  system. 
If  the  State,  as  observed  in  the  report,  "lacks  a  coordinated,  compre- 
hensive plan  of  rehabilitation  and  prevention,"  the  commission  pre- 
sents no  such  plan  and  leaves  the  question  open  for  future  discussion. 
There  is  not  a  single  concrete  suggestion  in  the  report  which  will  be 
helpful  to  those  who  are  interested  in  the  further  development  of  ex- 
isting methods  and  aiming  at  a  better  state  of  health  and  industrial 
well-being.  What  the  commission  has  to  say  with  reference  to  sug- 
gestions for  remedial  action  is  merely  in  the  nature  of  generalities,  and 
apparently  not  based  in  a  single  instance  upon  a  thorough  knowledge 
of  New  Jersey  facts. 

To  quote  from  the  reports  of  social-insurance  commissions  with 
reference  to  labor  and  sanitary  conditions  in  other  States  is  merely 
evidence  of  neglect  on  the  part  of  the  New  Jersey  Commission  to  in- 
form itself  with  reference  to  the  existing  state  of  facts  for  New  Jersey. 
It  is  said,  for  illustration,  that  the  Massachusetts  Commission  on 
Social  Insurance  has  declared  "that  the  principle  of  insurance  is  a 
desirable  one  for  application  on  a  sufficiently  wide  scale  to  safeguard 
every  wage-earner  in  the  Commonwealth  from  certain  of  the  evils  of 
sickness."  No  such  results  have  been  secured  in  any  country  in  which 
social  insurance  has  been  in  operation  for  many  years;  as  a  matter  of 
fact,  neither  in  England  nor  in  Germany  does  the  existing  system  of 
compulsory  sickness  insurance  effectively  reach  the  poorest  poor,  or 
the  unemployed  or  casual-labor  element,  or,  in  other  words,  that 
element  of  the  population  which  is  most  urgently  in  need  of  both 
pecuniary  aid  and  medical  assistance. 


56 


In  the  field  of  industrial  accident  prevention  no  other  country  has 
made  the  progress  achieved  by  the  United  States  on  a  strictly  voluntary 
basis  because  of  the  high  ideals  and  the  better  understanding  of  the 
manufacturers  who  effectively  apply  past  experience  and  present-day 
knowledge  to  the  solution  of  the  industrial  accident  problem. 

There  is  likewise  no  reference  in  the  report  to  even  one  of  our  great 
national  voluntary  health-promoting  activities,  such  as  the  National 
Tuberculosis  Association,  the  National  Committee  on  Child  Welfare, 
the  American  Society  for  the  Control  of  Cancer,  the  National  Com- 
mittee on  Malaria,  etc.  To  quote  the  opinion  of  the  California  Social 
Insurance  Commission  that  "health  insurance  offers  a  sensible,  prac- 
tical method  of  eliminating  in  part  the  most  distressing  features  of  the 
present  social  system,  economic  dependence  and  charitable  relief," 
and  that  "through  its  beneficial  effects  upon  two-thirds  of  the  popula- 
tion, health  insurance  would  mean  a  tremendous  gain  in  public  health," 
is  merely  to  reemphasize  the  fatuous  rehance  of  the  commission  on 
documentary  evidence,  more  or  less  misunderstood,  and  to  refrain  from 
the  acquisition  of  trustworthy  knowledge  based  upon  personal 
inquiry  into  existing  conditions  in  the  State.  There  has  been  no  "tre- 
mendous gain  in  public  health"  in  any  country  in  which  social  insur- 
ance had  been  in  operation  for  many  years,  but,  to  the  contrary,  the 
sickness  and  death  rates  of  this  country  in  industry  or  in  the  popula- 
tion at  large  are  by  every  investigation  shown  to  be  more  favorable 
than  those  for  foreign  countries  in  which  social  insurance  has  been  in 
force. 

Health  insurance  does  not  offer  "a  sensible,  practical  method  of 
eliminating  in  part  the  most  distressing  features  of  the  present  social 
system,  economic  dependence  and  charitable  relief."  Those  who  are 
most  in  need  of  care  and  comfort  during  illness  are  neither  in  England 
nor  in  Germany  properly  provided  for,  nor  would  this  be  the  case  under 
any  compulsory  health-insurance  system  thus  far  proposed  or  contem- 
plated in  this  country.  The  only  known  method  of  eliminating  the 
necessity  for  economic  dependence  and  charitable  relief  is  a  better 
education,  a  higher  degree  of  industrial  efficiency,  higher  wages,  more 
reasonable  hours  of  labor,  stated  vacations,  etc.,  or,  in  other  words,  a 
higher  and  more  effective  standard  of  life  than  the  one  which  prevails 
at  the  present  time.  But  no  country  in  the  world  has  made  the  social 
and  economic  progress  which  has  been  made  by  the  American  people 
during  the  last  thirty  years,  in  their  own  way  and  at  their  own  cost, 
without  Government  compulsion  or  interference  of  any  kind.  As 
evidence  that  compulsory  health  insurance  does  not  tend  to  remove 
pauperism  but,  quite  to  the  contrary,  rather  accentuates  its  occur- 

57 


rence,  I  quote  the  following  statement  by  Lord  Balfour  in  the  House  of 
Ivords,  on  January  29,  1918: 

I  have  the  figures  for  last  year  for  Edinburgh,  Glasgow,  and  Govan.  In 
I';diiil)urgh  nearly  a  thousand  people  in  the  year  have  got  this  benefit  wrong- 
fully, as  I  think;  and  in  Glasgow,  between  January,  1917,  and  January,  1918, 
nearly  10,000  people  received  this  insurance  benefit,  having  been  supported 
in  Poor  Law  institutions  during  illness.  I  think  I  have  said  enough  to  show, 
that  there  is  a  strong  case  for  reform,  and  that  a  public  scandal 
exists  which  this  opportunity  ought  to  be  taken  to  remedy. 

All  compulsory  health  insurance  as  proposed  in  this  country  rests 
fundamentally  upon  the  principle  of  financial  assistance  during  illness. 
Since  this  assistance  is  paid  for  only  to  the  extent  of  two-fifths  by  the 
employees  themselves,  the  remainder  is  a  charitable  contribution,  in 
the  strict  sense  of  the  term.  Even  though  it  is  made  a  statutory  right, 
it  is  not  a  right  in  the  ethical  sense,  since  it  is  not  a  just  return  for  ser- 
vices rendered  or  risk  assumed.  General  illness  has  nothing  to  do  with 
industry,  and  it  is  a  wrongful  imposition  upon  manufacturers  and  em- 
ployers to  charge  them  with  the  burden  of  social  insurance  when  they 
themselves  have  little  or  no  control  over  the  conditions  which  affect  the 
physical  welfare  of  their  employees  and  those  dependent  upon  them. 

The  New  Jersey  Commission  quotes  a  statement  by  the  New  Jersey 
State  Federation  of  Labor,  that  the  annual  convention  w^as  in  favor  of 
"a  universal  system  of  health  insurance.  .  .  in  order  that  efl&cient 
medical  treatment  may  be  furnished  to  all  sick  wageworkers,  and  due 
emphasis  may  be  placed  upon  the  prevention  of  industrial  sickness." 
All  the  evidence  from  England  and  Germany  proves  conclusively  that 
the  medical  treatment  under  so-called  health  or  sickness  insurance  is 
not  sufficient  and  does  not  meet  the  requirements  of  those  most 
urgently  in  need  of  adequate  care.  According  to  Dr.  William  A. 
Brend,  the  distinguished  author  of  a  treatise  on  "Health  and  the 
State,"  written  in  the  light  of  an  extended  experience  with  the  actual 
operation  of  national  health  insurance  in  Great  Britain,  the  facts  are 
that: 

Dissatisfaction  with  the  panel  sj'stem  is  wide-spread.  The  doctors  com- 
plain that  they  are  harassed  by  unnecessary  regulations  and  circulars  from 
administrative  authorities;  sick  visitors  and  agents  of  approved  societies  in- 
terfere with  their  treatment  of  patients ;  that  their  certificates  are  sometimes 
overruled ;  that  an  excessive  amount  of  clerical  work  is  required  from  them ;  and 
that  they  are  not  paid  fully  and  promptly.  The  non-panel  doctors  complain 
that  insured  persons  are  not  freely  permitted  to  be  attended  by  them.  The 
officials  of  approved  societies  state  that  they  cannot  rely  upon  the  doctors' 
certificates,  and  that  they  do  not  exercise  sufficient  care  when  examining 
patients.     Insured  persons  complain  that  they  do  not  get  proper  and  sufficient 

58 


treatment;  that  a  distinction  is  made  between  them  and  private  patients;  that 
sometimes  they  cannot  get  a  doctor  at  all ;  and  that  sometimes  they  are  made 
to  pay  for  services  to  which  they  are  entitled  without  charge. 


The  German  evidence  is  even  more  conclusive,  especially  so  in  view 
of  the  war  experience,  during  which  the  entire  administration  of  health 
insiu-ance  practically  became  an  annex  to  the  poor-law. 

Health  insurance  tends  strongly  towards  the  endowment  of  med- 
iocrity in  medicine  and  the  discouragement  of  practitioners  of  more 
than  average  ability.  Dr.  Alfred  Salter,  an  English  physician,  speak- 
ing in  1914  at  a  public  meeting  in  support  of  a  national  medical  service, 
stated  that  he  saw  "on  an  average  seventy-six  cases  in  the  morning, 
and  ninety-two  in  the  evening,"  three  and  one-quarter  minutes  were 
spent  on  each  patient,  one  and  one-quarter  of  which  was  taken  up  in 
writing.  It  is  also  said  that  "Patients  had  to  wait  on  an  average  two 
and  one-half  hours  for  their  turn,  unless  present  at  the  very  start." 

Compulsory  health  insurance  has  been  wholly  ineffective  in  pre- 
venting industrial  sickness  or  in  aiding  effectively  the  cause  of  general 
sanitary  progress.  The  countless  reports  of  English  health  officers  are 
silent  on  the  subject,  and  there  is  no  conclusive  or  convincing  reference 
in  the  reports  issued  by  the  National  Health  Insurance  Commission 
that  an  even  remotely  effective  system  of  coordination  of  health  insur- 
ance and  public  health  has  been  brought  about.  The  remarkable 
health  progress  of  England  was  all  achieved  before  national  health 
insurance  went  into  force,  and  in  no  country  in  the  world  has  there 
been  a  more  successful  development  of  local  sanitary  effort,  chiefly 
through  the  effective  coordination  of  the  work  of  the  Royal  Sanitary 
Instittite. 

In  this  country  corresponding  progress  has  been  made  and  further 
achievements  are  merely  a  broadening  of  the  functions  which  have 
been  found  effective  in  the  past.  Our  American  Public  Health  Asso- 
ciation, after  nearly  fifty  years  of  existence,  is  practically  only  at  the 
beginning  of  its  career  of  greatest  usefulness,  and  the  same  is  true  of 
the  larger  sphere  of  activity  of  the  National  Tuberculosis  Association, 
American  Child  Hygiene  Association,  the  American  Society  for  the 
Control  of  Cancer,  etc.  Compulsory  health  insurance  is  not  re- 
quired to  give  furtherance  to  sanitary  progress;  quite  to  the  con- 
trary, by  providing  financial  support  during  illness  it  is  practically 
certain  to  hinder  such  progress  rather  than  to  advance  it.  For 
these  and  many  other  reasons  there  is  the  most  serious  objection  to  a 
statement  attributed  in  the  report  to  the  president  of  the  New  Jersey 
State  Medical  Society,  reading  that  "in  so  far  as  the  general  purpose  of 

59 


health  insurance  is  concerned  in  preventing  or  palliating  human  dis- 
tress, the  medical  profession  is  favorably  impressed  with  and  invites 
it."  There  is  no  evidence  from  any  source  that  the  medical  profession 
is  favorably  impressed  with  health  insurance  or  desires  its  establish- 
ment in  this  country.  In  California  the  medical  societies  have 
strongly  opposed  health  insurance;  in  fact,  they  were  largely  instru- 
mental in  bringing  about  the  defeat  of  the  constitutional  amendment 
favorable  to  its  establishment  in  California  by  a  popular  vote  of 
133,858  for  and  358,324  against  it.  The  medical  profession  requires 
to  be  better  informed  concerning  health  insurance,  most  of  all  on  the 
subject  of  arbitrary,  bureaucratic  interference  with  its  functions  on 
the  part  of  the  vast  oihcial  staff  which  will  come  into  existence  to 
administer  the  practically  countless  rules  and  regulations,  most  of 
which  are  un-American  and  contrary  to  our  conception  of  a  republican 
form  of  government.  The  inevitable  result  of  such  legislation  is  to 
establish  class  distinctions  in  precisely  the  same  manner  as  the  old 
English  Poor  Law  brought  untold  sorrow  upon  millions  of  people  and 
practically  stratified  the  English  population,  with  a  strong  tendency 
towards  an  increase  in  the  permanent  pauper  class. 

Catch  phrases  are  not  a  solution  of  economic  problems,  and  the 
misuse  of  the  terms  "insurance"  and  "health"  is  for  the  deliberate 
purpose  of  deceiving  the  public.  Universal,  non-contributory  old-age 
pensions  are  poor-relief  under  another  name.  As  said  by  Professor  A. 
V.  Dicey,  one  of  the  most  distinguished  authorities  on  English  juris- 
prudence, "The  Old  Age  Pension  Act  is  a  bestowal  by  the  State  of 
pecuniary  aid  upon  one  particular  class  of  the  community,  namely,  the 
poorer  class  of  wage-earners.  It  is  in  essence  nothing  but  a  new  form 
of  outdoor  relief  for  the  poor."  The  same  conclusion  applies  to  com- 
pulsory sickness  insurance,  under  which  manufacturers  and  employers 
generally  are  forced  to  pay  two-fifths  or  one-half  of  the  total  cost, 
although  they  receive  no  direct  benefit  in  return.  It  is  absurd  to 
advance  the  argument  presented  by  the  New  Jersey  Commission  that 
"Contributors  to  private  charity  are  compelled  to -bear  that  part  of 
the  burden  which  rightfully  should  rest  on  industry."  It  is  a  profound 
fallacy  to  attempt  the  solution  of  the  social  and  economic  problems  of 
independent  wage-earners  on  the  basis  of  the  experience  gained  in 
charity  administration.  The  error  results  from  the  habit  of  viewing 
our  labor  element  as  a  class.  And  there  is  the  greatest  possible  danger 
that  this  view  may  be  accentuated  by  the  proposed  legislation,  which 
would  permanently  divide  the  American  working  people  into  those 
subject  to  compulsory  health-insurance  laws  and  those  not  falling 
within  its  arbitrary,  burdensome  and  restrictive  provisions. 

60 


There  is  nothing  in  the  report  which  reflects  the  judgment  of  quah- 
fied  medical  practitioners,  familiar  with  the  medical  experience  gained 
under  compulsory  health  insurance  in  England  and  Germany  and  else- 
where. On  the  Continent  such  experience,  as  I  have  shown  in  my 
address  on  "The  Failure  of  German  Compulsory  Health  Insurance," 
has  been  disastrous  to  the  morale  of  the  medical  profession  and  the 
system  has  lowered  perceptibly  the  profession's  standard,  to  the  ad- 
vancement of  which  heretofore  the  best  efforts  of  all  have  been  conse- 
crated, under  the  belief  that  there  can  be  no  enduring  social  progress 
which  does  not  rest  upon  a  further  advancement  in  medicine  as  a  heal- 
ing art. 


61 


SECOND  REPORT  OF  THE  MASSACHUSETTS  SPECIAL 
COMMISSION  ON  SOCIAL  INSURANCE,  JANUARY,  1918 

A  second  Massachusetts  commission  of  inquiry  was  appointed  by 
the  General  Court  of  Massachusetts  under  an  act  approved  May  25, 
1917.  This  commission  made  a  report  to  the  legislature  under  date  of 
January  15.  1918,  covering  a  somewhat  broader  field  of  original  investi- 
gation than  the  preceding  inquiry,  a  considerable  amount  of  new 
material  being  utilized,  especially  with  reference  to  dependent  families 
receiving  mothers'  aid.  The  commission  secured  the  co-operation  of 
the  State  Department  of  Health,  the  Bureau  of  Statistics,  the  State 
Board  of  Charities  and  tht  Massachusetts  Savings  Bank  Life  Insur- 
ance. It  held  a  number  of  public  hearings,  visited  several  important 
centers  of  industry,  and  a  determined  effort  was  made  to  ascertain  the 
viewpoint  of  wage-earners,  employers,  physicians,  pharmacists,  insur- 
ance companies  and  the  general  public.  The  conclusions  of  the 
majority  are  summarized  in  the  statement  that  "An  analysis  of  the 
evidence  reveals  no  growing  demand  in  the  Commonwealth  for  com- 
pulsory contributory  health  legislation.  On  the  contrary,  if  one  is  to 
judge  from  the  experience  of  the  former  commission  considering  this 
question,  there  appears  to  be  an  increasing  hostility  to  this  type  of  in- 
surance on  the  part  of  representatives  of  large  aggregations  of  indi- 
viduals who,  in  the  final  analysis,  would  be  most  vitally  affected  by 
such  a  measure."  In  continuation  it  is  said  that  "The  so-called  com- 
pulsory contributory  system  of  health  insurance  has  few  supporters. 
There  appear  to  be  two  serious  obstacles  to  the  enactment  of  legisla- 
tion of  this  character,  namely,  the  united  opposition  of  employer  and 
employee  to  the  scheme,  and  the  difiRcultics  presented  by  the  constitu- 
tional aspects  of  the  question."  In  recognition  of  the  constitutional 
difficulty  the  question  was  brought  squarely  before  a  constitutional 
convention,  which  was  requested  to  work  out  a  provision  to  the  effect 
"that  the  General  Court  shall  have  power  to  establish  systems  of 
social  insurance,  including  old-age  pensions  or  insurance  pensions  for 
physical  disability  arising  from  any  cause,  health  insurance,  maternity 
benefits,  insurance  against  unemployment,  and  compensation  to  work- 
men or  their  dependents  for  injuries  incurred  by  workmen  in  the 
course  of  or  arising  out  of  their  employment."  It  may  also  provide  for 
medical  care  as  well  as  money  payments,  and  may  require  that  the  cost 
of  any  such  system  or  systems  shall  be  borne  in  whole  or  in  part  by 

62 


the  Commonwealth  or  any  civil  division  thereof,  or  by  the  insured  or 
by  the  employer.  It  may  provide  that  claims  may  be  adjudicated  with 
or  without  a  jury,  and  that  employers  contributing  to  the  compensa- 
tion of  injured  workmen  or  their  dependents  shall  not  be  liable  to  any 
other  claim  for  such  an  injury.  The  provision  was  thoroughly  dis- 
cussed from  every  point  of  view,  but  on  July  30,  by  a  rising  vote 
of  43  yeas  to  107  nays,  following  an  entire  forenoon  of  debate,  the 
proposition  was  unconditionally  rejected. 

In  its  report  the  second  Massachusetts  Social  Insurance  Commis- 
sion directs  attention  to  the  fact  that  "No  law  can  be  created  without 
public  sentiment  or  enforced  without  the  belief  of  the  public  behind  it," 
and  it  expresses  it  as  its  opinion  that  "The  effect  of  enacting  legisla- 
tion of  this  character  would  not  be  conducive  to  the  mutual  well- 
being  and  good  feeling  that  exist  in  most  industries  at  the  present 
time."  "For,"  it  says,  "to  force  all  employers  to  contribute  under  a 
bill  of  this  kind  would  mean  a  cessation  of  much  of  the  excellent  wel- 
fare-work that  many  of  them  are  now  maintaining  or  rapidly  initiating 
into  their  plants."  The  rejection  of  the  constitutional  amendment 
by  a  vote  of  107  to  43  is  conclusive  evidence  of  the  fairness  of  the  view- 
point of  the  commission,  based  upon  a  thorough  and  impartial  in- 
vestigation practically  inclusive  of  the  entire  State. 

Reporting  upon  the  results  of  its  inspection  of  industrial  centers, 
industrial  plants,  etc.,  the  majority  of  the  commission  are  unanimous 
in  their  findings  that  "the  general  conditions  under  which  the  wage- 
earners  work  are  in  most  cases  very  good,  and  satisfactory  to  the 
workers  themselves.  In  the  more  modern  textile  mills,  as  well  as  in 
the  machine  industries,  there  are  improved  means  of  ventilation  and 
lighting,  which  are  in  every  case  to  be  commended.  There  was  found 
to  be  a  disposition  on  the  part  of  the  industries  to  provide  rest-rooms 
particularly  in  the  departments  where  women  are  employed.  Em- 
ployees are  apparently  better  protected  now  against  accidents,  danger- 
ous machinery  and  hazards  in  general  than  they  were  formerly."  The 
commission  also  ascertained  that  "The  pay  of  the  employees  generally 
was  much  higher  than  the  commission  had  been  led  to  suppose."  No 
evidence  in  conflict  with  these  conclusions  was  forthcoming  at  the 
hearings  held  throughout  the  State. 

Of  the  representatives  of  labor  who  participated  in  the  first  hearing 
at  the  State  House,  some  twenty-two  spoke  on  the  subject  of  health 
insurance.  According  to  the  report,  "Most  of  them  had  been  in- 
structed in  advance  by  their  local  organizations.  Practically  all  who 
appeared  at  this  time  expressed  themselves  in  favor  of  some  form  of 
health  insurance,  but  stated  that  they  were  opposed  to  a  so-called 

63 


'contributory'  sclienie.  They  expressed  themselves  in  favor  of  a  non- 
contributory  form  of  insurance,  if  any."  Two  of  the  labor  repre- 
sentatives argued  in  favor  of  an  investigation  into  the  more  dangerous 
trades,  "in  which  they  believed  there  was  a  greater  risk  to  a  working- 
man's  health  than  in  most  occupations,"  and  "they  favored  the 
extension  of  the  Workman's  Compensation  Act  to  cover  more  ade- 
quately those  diseases  directly  attributable  to  occupation."  Only  one 
out  of  twenty-two  of  the  labor  representatives  who  testified  before  the 
commission  was  in  favor  of  a  contributory  plan  of  insurance.  One  of 
the  delegates  suggested  in  his  remarks  that  "higher  wages  and  better 
working-conditions  would  alleviate  and  solve  the  sickness  problem." 
In  commenting  upon  the  hearings  the  commission  points  out  that  "it 
is  interesting  to  note  that  those  who  most  strongly  objected  to  any 
form  of  health  insurance  at  this  time  were  those  leaders  in  the  labor 
movement  who,  it  seemed  to  the  commission,  had  given  most  thought 
and  study  to  social  insurance."  In  support  of  this  the  commission 
quoted  the  remarks  of  the  president  of  the  American  Federation 
of  Labor,  Mr.  Samuel  Gompers,  strongly  in  opposition  to  any  and 
every  form  of  compulsory  health  insurance.  One  very  important  fact 
was  disclosed  at  the  hearings  of  labor  representatives  with  regard  to 
the  extent  to  which  their  members  were  already  insured  against  ill- 
ness. It  is  said  that  "The  majority  of  the  men  stated  that  their  mem- 
bers generally  carried  some  form  of  insurance,  and  that  there  was  a 
disposition  on  the  part  of  the  workmen  now  to  insure  themselves  more 
than  they  had  in  the  past." 

The  position  of  emplojxrs  on  the  subject  of  social  insurance  ap- 
peared to  be  rather  one  of  indifiference.  Only  a  few  representatives  of 
industry  appeared  before  the  commission,  although  a  better  representa- 
tion was  had  outside  of  the  city  of  Boston.  The  principal  objections 
put  forward  by  employers  in  the  chief  industrial  cities  of  the  Common- 
wealth were,  in  part,  "that  no  exigency  exists  for  the  establishment  of 
compulsory  health  insurance;  that  employers  were  rapidly  improving 
working-conditions  in  their  factories;  that  welfare- work*  and  mutual 
benefit  societies  were  available  for  insurance  purposes  on  a  voluntary 
plan ;  that  the  adoption  of  a  health-insurance  scheme  similar  to  those 
prevailing  in  Europe  would  in  effect  be  taxing  the  people  for  the  indis- 
cretions of  the  beneficiaries;  that  the  State  should  concentrate  its 
efforts  on  preventive  work  rather  than  on  the  attempt  to  cure  diseases 
through  insurance;  that  the  Workmen's  Compensation  Act  had  already 

•An  excellent  account  of  what  is  being  done  in  the  direction  of  welfare-work  and  deliberate  im- 
provement in  workinK-conditions,  is  presented  in  Bulletin  No.  250  of  the  United  States  Bureau  of 
Labor  Statistics  on  "Welfare  Work  for  Employees  in  Industrial  Establishments,"  Washington,  1919. 

64 


taken  some  of  the  liberties  away  from  the  individual  wage-earner,  and 
that  health  insurance  would  take  more;  that  the  tendency  of  health 
insurance  would  be  to  pauperize  the  workers;  that  health  insurance 
was  not  suited  to  American  needs;  that  health  insurance  abroad  was 
economically  unsuccessful  ;*  that  its  cost  was  prohibitive ;  that  it  was  an 
encouragement  of  malingering,  and  that  self-respecting  labor  did  not 
desire  it." 

Employers  also  directed  attention  to  the  fact  that  sickness  insur- 
ance abroad  had  tended  to  increase  malingering.! 

Two  meetings  were  held  exclusively  for  the  purpose  of  hearing 
physicians  and  representatives  of  medical  societies.  After  pointing 
out  that  many  of  the  physicians  who  testified  had  obviously  given 
serious  thought  to  the  subject  under  consideration,  it  was  said  that, 
"As  a  whole,  they  seemed  inclined  to  consider  it  from  a  liberal  point 
of  view,  and  many  expressed  their  willingness  to  withdraw  their  oppo- 
sition to  any  form  of  sickness  insurance,  provided  it  could  be  demon- 
strated beyond  question  that  the  scheme  would  actually  benefit  the 
wage-earners  and  improve  health  conditions."  Yet  of  more  than  one 
hundred  physicians  who  testified  before  the  commission,  "only  two 
were  ready  to  declare  themselves  in  favor  of  insuring  the  wage-earners 
against  disease."  It  was  the  unanimous  viewpoint  of  the  medical 
profession  "that  the  cost  of  medical  care  and  attention  was  not  beyond 
the  means  of  the  ordinary  working  man  to-day,  and  that  medical 
charges  in  Massachusetts  were  not  excessive."  To  substantiate  their 
contention  they  submitted  a  fee  schedule,  which,  in  the  opinion  of  the 
commission,  "compared  very  favorably  with  the  fees  charged  for  the 
same  service  in  other  States."  With  regard  to  the  assertion  that  many 
patients  did  not  pay  their  bills  and  that  therefore  the  economic  posi- 
tion of  the  average  medical  practitioner  was  decidedly  precarious,  one 
physician  of  more  than  thirty  years'  experience  in  a  rural  community 
testified  that  80  per  cent,  of  his  patients  were  able  to  pay  their  bills  in 
full. 

Regarding  the  proposal  that  the  free  clinics  in  the  State  be  ex- 
tended, this  suggestion  was  approved  in  most  instances.  J  The  large 
majority  of  physicians  evidently  believe  it  to  be  "unwise  to  enact  any 
health-insurance  bill  at  the  present  time,"  but  "many  of  them  were 


*For  extended  observations  on  the  economic  aspects  of  health  insurance  with  special  reference  to 
Germany,  see  my  "Facts  and  Fallacies  of  Compulsory  Health  Insurance,"  Prudential  Press,  1917,  and 
the  "Failure  of  Compulsory  Health  Insurance  in  Germany — A  War  Revelation,"  Prudential  Press,  1918 

tFor  much  valuable  evidence  of  malingering  under  national  health  insurance  and  workmen's  com- 
pensation, see  "Malingering  or  the  Simulation  of  Disease,"  by  Jones  and  Llewellyn,  London,  1917,  and 
"Malingering  and  Feigned  Sickness,"  by  Sir  John  Collie,  London,  1917 

tFor  an  excellent  account  of  dispensaries,  see  "Dispensaries  and  their  Management  and  Develop 
ment,"  Michael  M.  Davis  and  Andrew  R.  Warner,  M.  D.,  New  York;  1918. 

65 


reluctant  to  express  their  opposition  to  legislation  of  this  kind  lest 
their  position  be  misunderstood."  "It  was  the  opinion  of  most  of 
them  that  there  was  not  the  need  in  the  Commonwealth  for  health 
insurance  which  some  maintain,"  and,  further,  that  "Medical  service, 
they  say,  is  now  available  to  the  working  man  and  to  those  unable  to 
pay  either  a  hospital  fee  or  a  physician's  fee.  In  case  of  inability  to 
pay,  both  are  provided  without  cost."  All  of  the  physicians  regarded 
it  as  "highly  important  that  the  existing  health  agencies  should  be  ex- 
tended wherever  possible,  and  many  of  them  advocated  larger  appro- 
priations as  a  more  adequate  solution  of  this  problem."  Convincing 
evidence  was  presented  by  the  city  physician  of  New  Bedford  regard- 
ing a  reduction  in  the  cases  of  tuberculosis  treated  at  the  local  sana- 
torium. In  1915  out  of  210  cases  treated  at  the  sanatorium  120  were 
mill-operatives;  during  1916  there  were  83  cases  of  mill-operatives  out 
of  a  total  of  225  cases,  and  in  1917  only  44  out  of  245,  or  18.0  per  cent. 
As  regards  the  important  question  whether  or  not  health  insurance 
would  reach  the  real  labor  element  most  urgently  in  need  of  the  system, 
qualified  medical  opinion  was  practically  unanimous  that  this  would 
not  be  the  case,  for,  as  one  prominent  physician  took  occasion  to  point 
out,  "To  pay  a  man  an  indemnity  for  time  lost  in  sickness  is  not  in- 
suring him  against  sickness  in  any  way.  It  may  make  his  lot  while 
sick  more  comfortable,  but  the  matter  of  keeping  well  is  largely  a  ques- 
tion of  hygiene,  and  hygiene  is  largely  a  question  of  education."  The 
commission,  in  this  connection,  drew  attention  to  a  resolution  passed 
by  the  Section  on  Preventive  Medicine  and  Public  Health  of  the 
American  Medical  Association,  after  a  full  discussion,  at  a  meeting 
held  in  New  York  city  on  June  6,  1917,  reading  that 

Resolved,  That  after  full  discussion  and  careful  consideration  of  the  subject 
the  section  on  Preventive  Medicine  and  Public  Health  of  the  American  Medi- 
cal Association  hereby  instructs  its  delegates  of  the  House  of  Delegates  of 
the  American  Medical  Association  to  oppose  the  scheme  for  compulsory 
health  insurance  in  every  way  possible. 

The  commission  also  points  out,  by  way  of  further  emphasis,  that 
a  member  of  the  American  Medical  Association,  in  submitting  this 
resolve,  had  made  the  following  comment  to  the  commission:  "This 
resolution  was  passed  after  full  and  careful  discussion  of  health 
insurance.  Delegates  were  present  from  all  the  States  in  the  union; 
hence  their  attitude  can  be  taken  as  nearly  the  attitude  of  all  the 
medical  societies  in  most  of  the  States." 

Among  the  more  active  efforts  on  the  part  of  the  medical  pro- 
fession  in   its   opposition   to  compulsory    health    insurance,    a   brief 

66 


reference  requires  to  be  made  to  the  Somerville  Medical  Society.  In 
a  special  publication  on  "State  Medicine,  Misnamed  Health  Insur- 
ance," it  is  said  at  the  outset  that  "There  is  not  a  medical  society, 
there  is  not  a  lay  society,  there  is  no  body  of  organized  men  in  Massa- 
chusetts that  has  asked  for  this  legislation.  No  general  practitioner 
nor  special  practitioner,  as  far  as  any  one  has  been  able  to  ascertain; 
but  there  is  a  society  called  'The  American  Association  for  Labor 
Legislation,'  with  headquarters  at  New  York,  which  has  asked  for 
this  legislation.  This  association  is  allied  to  an  international  associa- 
tion which  has  its  headquarters  in  Basle,  Switzerland.  This  interna- 
tional organization  has  sixteen  branches  in  as  many  foreign  countries. 
It  has  nothing  to  do,  directly  or  indirectly,  with  organized  labor. 
This  association  is  the  head  and  front  of  the  agitation  for  health  insur- 
ance in  this  country."  Dr.  Charles  E.  Mongan,  the  author  of  the 
report  of  the  Somerville  Medical  Society,  remarks,  in  continuation, 
that  "The  proposition  is  practically  an  indictment  of  the  medical  pro- 
fession of  Massachusetts.  They  say  we  have  not  taken  care  of  the 
poor,  the  sick  poor.  And  now  they  are  going  to  take  it  out  of  our  hands, 
notwithstanding  the  fact  that  nobody  in  Massachusetts  asked  for 
such  legislation.  They  are  going  to  give  us  a  cure  for  poverty,  by 
taking  away  from  us  the  cure  of  the  sick  and  putting  it  in  the  hands 
of  a  commission  appointed  by  the  governor." 

The  consensus  of  qualified  opinion  on  the  part  of  the  medical  pro- 
fession is  fully  shared  by  representatives  of  the  pharmaceutical 
profession,  whose  interests  would  be  most  seriously  affected  by  com- 
pulsory health  insurance.  The  Massachusetts  commission  refers  to 
the  evidence  presented  by  a  representative  of  the  State  Association  of 
Druggists,  representing  1,500  registered  pharmacists,  all  strongly 
opposed  to  any  plan  of  state  health  insurance.  Their  viewpoint,  it 
was  said,  was  sustained  by  the  National  Association  of  Druggists, 
with  a  membership  of  more  than  40,000  retail  druggists,  scattered 
throughout  the  country,  which  had  recently  gone  on  record  in  its  oppo- 
sition to  "the  principle  of  sickness  insurance."  The  commission 
quotes  from  the  Journal  of  the  American  Pharmaceutical  Association, 
of  October,  1917,  to  the  effect  that  "if  compulsory  health  insurance 
becomes  a  fact,  it  will  not  only  be  a  public  menace  but  it  will  be  the 
greatest  blow  ever  suffered  by  the  drug  trade  of  America.  .  .  . 
The  National  Drug  Trade  Conference  and  the  American  Drug  Manu- 
facturers' Association  have  declared  their  opposition  to  the  movement 
until  time  can  be  afforded  for  a  more  careful  study  of  the  situation." 
And  it  is  therefore  suggested  that  this  should  be  the  attitude  to  be 
taken  "by  the  American  Pharmaceutical  Association  and  by  all  other 

67 


branches  and  divisions  of  the  trade."  The  article  in  question  to 
which  the  commission  refers  was  written  by  Mr.  Harry  B.  Mason, 
whose  argument  is  one  of  unusual  thoroughness,  including  observa- 
tions on  the  efTects  on  the  drug  trade  under  the  British  act,  the  in- 
crease in  malingering  and  the  un-American  element  of  compulsion.* 
In  considering  briefly  the  viewpoint  of  the  insurance  companies, 
chiefly,  of  course,  those  transacting  a  casualty  business,  the  com- 
mission directs  attention  to  a  very  serious  error  in  the  report  of  the 
previous  commission  on  social  insurance,  relative  to  the  amount  paid 
for  industrial  insurance  in  the  State  of  Massachusetts  and  the  amount 
returned  to  the  policyholder.  The  error  was  so  much  more  serious 
in  that  the  same  had  been  incorporated  into  the  inaugural  address 
of  Governor  McCall  for  the  year  1917.  The  commission  pointed  out 
that  the  payment  to  beneficiaries  including  all  sums  set  aside  to  their 
credit  as  reserve,  was  actually  $8,277,000,  instead  of  $4,094,000, 
according  to  the  report  of  the  first  social-insurance  commission,!  The 
evidence  of  the  insurance  representatives  is  summarized  by  the  com- 
mission in  the  statement  that  "A  study  of  all  countries  in  which 
social  insurance  has  been  enacted  will  show  that  want,  misery  and 
suffering  still  exist,  and  in  practically  the  same  degree."  Other 
grounds  advanced  in  opposition  to  the  measure  by  insurance  repre- 
sentatives are  set  forth  by  the  commission  as  follows: 

(1)  The  test  of  any  economic  measure  should  be  the  net  profit 
resulting  from  it.  It  cannot  be  shown  that  any  net  profit  has  ever 
accrued  from  sickness  insurance. 

(2)  The  development  of  individualism  will  be  discouraged. 

(3)  Health  insurance  is  paternalistic. 

(4)  If  such  a  measure  is  passed  and  the  experience  of  other  coun- 
tries is  repeated,  there  will  be  increased  sickness  and  of  longer  dura- 
tion than  before. 

Of  the  evidence  presented  by  fraternal-insurance  societies  an 
illustration  is  of  interest,  according  to  which  "a  laboring  man  may 

♦For  much  valuable  information  on  the  effect  of  national  health  insurance  on  the  drug  trade,  see 
"Health  and  the  State,"  by  W.  A.  Brend,  London,  1918.  Also  report  of  the  departmental  committee 
appointed  to  consider  the  drug  tariff  under  the  National  Insurance  Act,  London,  1915.  Prosecutions 
for  overprescribing  are  of  such  common  occurrence  as  not  to  attract  attention. 

tThe  accumulated  Industrial  reserve  of  twenty-three  Industrial  companies  doing  active  business 
in  the  United  States  on  December  31,  1918,  was  $67,153,715.  This  vast  sum  stands  to  the  credit  of 
Industrial  policyholders,  and  that  it  is  accumulated  for  the  payment  of  future  claims  is  entirely  ignored 
by  those  who  are  making  the  propaganda  for  compulsory  health  insurance.  In  proportion  to  the 
premiums  received  by  Industrial  companies  in  1918.  the  payments  to  Industrial  policyholders,  plus 
Industrial  reserve  increase,  amounted  to  90.5  per  cent,  of  Industrial  premiums  received.  This  unusually 
high  proportion  was,  of  course,  largely  because  of  the  heavy  mortality  payments  on  account  of  the 
influenza  epidemic. 

68 


today  purchase  for  a  small  charge  of  from  25  cents  to  80  cents  a  month 
health-insurance  protection  which  would  pay  him  from  $25  to  $100 
a  month,  (depending  on  his  occupation)  during  disability  from  sick- 
ness. As  a  rule  such  health  insurance  and  the  combined  premiums 
(for  additional  protection)  usually  runs  from  $1.00  to  $1.25  a  month." 
This  kind  of  evidence,  however,  cannot,  of  course,  be  considered  con- 
clusive. In  a  general  way,  the  insurance  companies,  societies,  etc., 
did  not  actively  concern  themselves  with  the  question,  largely,  no 
doubt,  upon  the  theory  that  the  problem  was  one  primarily  concerning 
employers  and  employees,  on  the  one  hand,  and  the  medical  and 
pharmaceutical  professions,  on  the  other.  The  commission,  however, 
took  occasion  to  point  out  that  "some  of  the  insurance  companies  are 
engaged  in  welfare- work  in  the  Commonwealth,  which  appears  from 
all  accounts  to  be  of  a  constructive  and  preventive  character,  and  is 
being  carried  on  apparently  with  quite  a  degree  of  success.* 


♦Attention  may  be  directed  to  the  list  of  scientific  publications  issued  by  The  Prudential  Insur- 
ance Company  of  America,  as  shown  on  page  4.  These  publications  will  indicate  the  growing  inter- 
est of  life  insurance  companies  in  the  health  progress  of  the  nation  and  matters  related  thereto. 


69 


SIvCOND   RErORT  OF  THE   COMMONWEALTH   CLUB 
OF  CALIFORNIA,   OCTOBER,  1918. 

Ill  continuation  of  its  investigations,  the  Social  Insurance  Commit- 
tee of  the  Commonwealth  Club  of  California,  prepared  a  second  report, 
which  was  presented  to  the  Club  on  September  19,  1918,  at  a  meeting 
attended  by  about  450  persons,  including  346  members.  The  discus- 
sion was  with  particular  reference  to  the  adoption  of  the  proposed 
amendment  to  the  Constitution,  making  special  provision  for  the  estab- 
lishment of  compulsory  health  insurance  in  the  State  of  California. 
The  meeting  was  presided  over  by  the  Hon.  Albert  E.  Boynton,  chair- 
man of  the  California  Industrial  Commission.  The  chairman  of  the 
Social  Insurance  Committee,  Mr.  Ansley  K.  Salz,  introduced  the  sub- 
ject with  some  preliminary  remarks  favorable  to  the  adoption  of  the 
constitutional  amendment,  but  outlining  various  types  of  health  in- 
surance, as  follows : 

a.  The  general  plan  of  the  American  Association  for  Labor  Legislation 
which  calls  for  administration  by  district  boards  comprising  employers, 
employees  and  state  representatives,  also  assessment  of  cost — forty  per  cent, 
to  employer,  forty  per  cent,  to  employee,  and  twenty  per  cent,  to  the  state. 

b.  The  tentative  plan  of  the  California  Social  Insurance  Commission. 

c.  The  proposal  that  free  medical  attention  be  provided  for  the  entire 
state's  population  by  the  state. 

d.  The  proposal  that  health  insurance  should  be  a  matter  of  national 
instead  of  state  legislation. 

e.  That  only  a  voluntary  system  should  be  enacted. 

f.  That  only  cash  benefit  insurance  be  provided,  and  the  beneficiary 
purchase  his  medical  and  hospital  cafe,  drugs,  etc.,  as  at  present. 

The  urgency  of  the  amendment  was  explained  by  reference  to  the 
problem  of  poverty  and  the  causes  of  economic  distress,  the  argument 
being  advanced  that,  "While,  to  a  certain  extent,  poverty  is  due  to 
individual  sloth  or  vice,  these  causes  are  insignificant  compared  to  the 
hazards  of  life  which  are  beyond  the  immediate  control  of  the  person 
affected,  which  descend  here  and  there,  like  lightning,  striking  down 
their  victims  from  a  position  of  economic  security  to  a  position  of 
temporary  or  permanent  economic  dependence."  The  foregoing,  of 
course,  is  not  an  argument  but  merely  an  expression  of  personal 
opinion  without  scientific  value  in  economic  legislation.  Equally 
unsatisfactory  is  the  resulting  conclusion  that  "Sickness  prevention 
and  sickness  insurance  should  go  forward  together,"  for  in  no  country 
in  which  social  insurance  has  been  in  operation  for  a  number  of  years 
has  sickness  prevention  attained  the  measurable  proportions  com- 

70 


parable  to  the  sanitary  progress  made  in  the  several  states  of  the 
United  States  without  compulsion  or  coercion  under  the  misleading 
terms  of  insurance. 

The  argument  includes  a  very  brief  historical  sketch  of  health  in- 
surance, but  voluntary  as  well  as  compulsory  systems  are  referred  to 
indiscriminately,  including,  for  illustration,  those  of  France,  Belgium 
and  Denmark,  which  have  nothing  in  common  with  the  German  system. 
The  granting  of  state  aid  to  voluntary  systems  as  an  encouragement 
to  thrift  is  a  totally  difTerent  conception  of  social  amelioration  than 
the  theory  of  coercion  or  compulsion  which  is  obviously  opposed  to 
freedom  of  action  in  a  field  which  heretofore  has  been  left  exclusively 
to  private  initiative.  Furthermore,  the  French  and  the  Belgian  sys- 
tems particularly,  have  little  if  anything  to  do  with  sickness  insurance, 
being  rather  subsidized  pension  schemes  during  prolonged  periods  of 
disability  and  old  age.  No  evidence  is  produced  as  to  the  economic 
needs  of  the  wage-earners  of  California,  but  erroneous  conclusions  are 
drawn  from  a  small  group  of  dependent  persons,  chiefly  such  as  are 
represented  by  those  who  are  cared  for  through  associated  charities  or 
who  are  otherwise  in  receipt  of  poor  relief.  It  is  argued  that  "all  those 
most  needing  health  insurance  will  not  fail  to  be  covered,"  regardless 
of  the  fact  that  under  no  system  of  social  insurance  in  Great  Britain 
and  on  the  continent  of  Europe  are  the  poorest  poor  adequately  and 
properly  provided  for. 

It  is  furthermore  advanced  as  an  argument  in  favor  of  compulsory 
health  insurance  that  such  a  system  will  not  require  "new  money  to 
be  raised  for  a  new  purpose,"  regardless  of  the  fact  that  in  every  coun- 
try in  which  social  insurance  is  in  operation  large  contributions  arc 
made  by  the  state  to  supplement  insufficient  contributions  raised 
jointly  from  the  employer  and  the  employee.  Particularly  has  this 
been  the  case  in  Great  Britian,  and  the  facts  are  a  matter  of  Parlia- 
mentary record  and  accessible  to  anyone  anxious  to  ascertain  the 
truth. 

It  is  estimated  that  the  cost  of  a  number  of  benefits,  the  true  ex- 
pense of  not  one  of  which  can  be  accurately  determined  at  the  present 
time,  "will  be  approximately  four  per  cent,  of  wages."  In  Germany 
the  statutory  proportion  has  been  raised  to  six  per  cent.,  and  it  is  esti- 
mated that  it  will  reach  ten  per  cent.,  to  provide  adequately  for  the 
needs  of  all  who  require  sickness  attention  and  sickness  relief.  It  is 
further  estimated  in  Germany  that  the  total  cost  of  all  forms  of  social 
insurance  will  reach  not  less  than  ticenty-six  per  cent,  of  the  ^vage- 
earners'  income  if  present  methods  continue  to  be  followed  and  are 
amplified    in    accordance    with    the   demands  of  the  Socialist  Labor 

71 


Tarty,  'l^liis  hiirdcii  is  nol  a  natural  one,  but  largely  the  result  of  an 
artificial  systtni,  under  which  malingering  on  an  enormous  scale  is 
encouraged,  to  the  moral  detriment  of  wage-earners,  to  the  pecuniary 
loss  of  employers,  and  the  serious  economic  disadvantage  of  the  state. 

In  another  section  of  the  report,  and  purely  as  a  matter  of  guess- 
work opinion,  the  argument  is  advanced  that  "there  will  be  no  added 
cost  for  a  system  of  health  insurance,"  and  that,  according  to  the  esti- 
mates of  the  California  commission,  which  are  not  given  in  the  report 
in  such  a  form  as  is  susceptible  of  analysis,  the  cost  "will  average  about 
$1.50  per  month  per  insured  worker."  In  support  of  the  theory  that 
health  insurance  will  materially  aid  preventive  health  measures,  it 
is  said  that  "Experience  in  all  branches  of  insurance  shows  that  pre- 
vention and  insurance  go  hand  in  hand,  instead  of  one  before  the 
other.  The  'safety  first'  movement  followed  workmen's  compensa- 
tion insurance,  instead  of  preceding  it."  This  is  in  plain  contradiction 
of  the  fact  that  insurance,  broadly  speaking,  does  not  concern  itself 
with  prevention,  and  is  historically  incorrect,  for  the  Safety  Institute 
of  America,  in  New  York  City,  was  established  before  the  workmen's 
compensation  law  went  into  effect,  and  safety  efforts  in  industry  were 
developed  with  a  fair  promise  of  success  before  workmen's  compensa- 
tion laws  gave  additional  force  to  the  movement  for  safety  first  in 
industry.  For  some  years  at  least,  the  Safety  Institute  of  America,  and 
the  National  Safety  Council,  have  given  extended  consideration  to 
safety  in  the  home  and  everyday  life  without  reference  to  workmen's 
compensation  insurance,  or  insurance  of  any  other  kind. 

The  Social  Insurance  Committee  answered  the  objection  that  com- 
pulsory health  insurance  will  have  a  detrimental  effect  upon  the  med- 
ical profession,  by  the  statement  that  "England's  experience  shows 
that  the  profession,  by  its  own  testimony  was  able  to  do  better  work 
and  bring  better  care  to  the  people  under  the  English  Health  Insurance 
Act,  than  under  the  conditions  of  private  practice,  and  that  from  a 
financial  standpoint,  also,  the  system  has  been  found  satisfactory  to 
the  profession."  This  is  a  grotesque  and  deliberate  perversion  of  the 
facts.  Private  practice  in  England  has  been  and  is  in  every  way 
superior  to  panel  practice,  and  many  panel  patients  prefer  to  pay  their 
own  physicians  rather  than  make  use  of  the  services  of  panel  doctors. 
Evidence  to  this  effect  is  contained  in  practically  every  issue  of  the 
British  Medical  Journal,  which  contains  hundreds  of  letters  com- 
plaining of  the  thoroughly  unsatisfactory  methods  of  panel  doctors' 
treatment,  particularly  in  congested  or  industrial  districts.  From 
the  fmancial  point  of  view,  the  question  of  adequate  remuneration  has 
been  one  of  almost  constant  controversy  between  the  medical  profes- 

72 


sion  and  the  Government  since  the  act  went  into  operation,  and  never 
so  much  as  at  the  present  time.  The  demand  is  practically  for  a 
doubling  of  the  capitation  fee,  which  if  granted,  will  involve 
enormous  additional  expenditures,  which  must  be  met  either  by 
a  treasury  grant  from  general  taxation,  or  by  a  material  increase  in  the 
contributions  on  the  part  of  employers  or  employees,  or  both. 

To  advance  arguments  so  plainly  in  contradiction  of  the  truth 
does  not  enhance  the  respect  of  the  impartial  critic  for  the  fairness  of 
the  Social  Insurance  Committee  of  the  Commonwealth  Club  of  Cali- 
fornia. The  number  of  names  signed  to  the  major  report  is  fourteen, 
while  the  minority  report  contains  twelve.  The  report  against  the 
amendment  among  other  arguments  properly  points  out  that — 

The  insurance  will  not  reach  the  lower  stratum  of  society — that  is  to  say, 
the  sick,  the  needy,  and  the  destitute.  No  provision  is  to  be  made  for  the 
care  of  independent  workers,  farm  laborers,  domestic  servants  and  unem- 
ployed; hence  the  proposition  is  not  humanitarian  and  will  not,  to  any  extent 
relieve  the  public  from  maintaining  clinics,  hospitals  and  other  public  charities 
for  the  sick  poor. 

This  statement  is  in  strict  conformity  to  the  fact,  as  can  easily  be 
ascertained  by  reference  to  poor-law  practice  in  England  and  the 
records  of  poor-law  institutions,  which  show  a  considerable  propor- 
tion of  paupers  insured,  or  for  at  least  part  of  the  time,  under  national 
health  insurance. 

Equally  to  the  point  is  the  following  statement  that — 

The  passage  of  this  amendment  will  compel  the  workman  to  buy  and  pay 
for  sickness  insurance  whether  he  wants  it  or  not,  and  make  his  home  subject 
to  invasion  by  inquisitive  political  insi}ectoFS  and  investigators. 

It  is  only  necessary  in  this  connection  to  refer  to  the  "Behavior 
During  Sickness  Regulations,"  which  have  the  force  of  statutory  orders 
under  the  British  Health  Insurance  Act,  to  emphasize  the  point  that 
the  liberty  of  the  subject  has  been  materially  abridged  and  is  in  a  fair 
way  of  being  further  curtailed  by  additional  rules  and  regulations, 
which  but  a  few  years  ago  would  have  been  considered  absolutely 
'opposed  to  every  conception  of  English  liberty  and  freedom  in  a  de- 
mocracy. It  has  been  well  said  in  this  connection  by  Sir  Arthur  Clay, 
in  the  introduction  to  "The  Dangers  of  Demvcracy,"  by  the  late 
Thomas  Mackay,  that — 

Dread  of  the  advance  of  bureaucracy  is  spreading  widely,  and  the  latest 
triumph  of  State  Socialism,  the  National  Insurance  Act,  has  seriously  alarmed 
classes  that  have  hitherto  remained  unaiTected  and  unconscious  of  the  rapidly 
growing  menace  to  personal  liberty. 

And  further,  with  reference  to  the  act  in  its  particular  relation  to 
the  medical  profession,  that — 

73 


This  Act  has  already  shown  how  State  Socialism— beginning  with  the 
I.ooRst  classes  tends  to  draw  higher  grades  of  the  community  within  its 
paraLvsiiig  grasp:  under  its  operation  many  members  of  one  of  the  noblest 
and  most  intellectual  professions,  have  been  partly  cajoled  and  partly  forced 
to  exchange  freedom  for  servitude,  and  compelled  to  accept  the  rate  of  pay  at 
which  the  state  assesses  the  value  of  their  services.  When  the  profession  at 
last  realized  the  menace  of  their  liberty  they  made  a  gallant  fight,  but  the  end 
was  inevitable,  and  their  resistance  only  served  to  show  that  a  Government 
hacked  by  a  subservient  majority  in  the  House  of  Commons  and  possessed 
of  unlimited  patronage,  is  as  irresistible  morally  as  it  is  physically. 

In  contrast  to  the  majority  statement  that  the  act  will  not  increase 
taxation,  it  is  said  by  the  minority  that — 

The  commission  confesses  that  the  measure  would  cost  not  less  than  fifty 
millions  a  year  in  jicrpetuity — this  in  the  face  of  the  fact  that  the  cost  of 
government  has  doubled  in  this  state  within  a  few  years  and  all  are  pledged 
to  retrenchment.  We  are  now  given  to  understand  that  the  state  will  not 
pay  as  fully  as  suggested  at  first.  Does  not  this  mean  that  employers  will 
have  to  pay  about  all.  or  is  labor  to  receive  a  part  of  its  wages  in  this  form? 

Our  foremost  authority  on  economics,  Professor  Taussig,  of  Har- 
vard University,  has  placed  on  record  his  view  that  social  insurance, 
in  its  final  analysis,  is  all  paid  out  of  wages,  but  while  it  may  not  bring 
about  a  reduction  in  wages  it  certainly  hinders  an  increase  in  wages 
because  of  a  shifting  of  the  incidence  of  taxation. 

With  reference  to  the  effect  of  compulsory  health  insurance  on 
voluntary  thrift,  it  is  said  that  such  a  system  "will  cripple  or  destroy 
fraternal,  mutual  and  trade  union  benefit  funds,  none  of  which  will  be 
able  to  compete  with  insurance  organization  subsidized  by  unwilling 
taxpayers."  The  Friendly  Societies  of  England  have  either  lost  on 
the  voluntary  side  or  reached  a  stationary  condition,  over-emphasis 
being  given  to  the  state  side  of  the  business,  which  is  naturally  less 
difficult  because  of  the  element  of  coercion.  The  complaint  is  wide- 
spread throtighout  England,  and  sustained  by  the  foremost  author- 
ities, that  the  old  friendly  society  spirit,  to  w^hich  English  wage-earners 
owe  in  a  large  measure  their  high  standing  in  the  labor  world,  has  been 
irreparably  injured  by  compulsory  health  instirance. 

Equally  emphatic  is  the  concensus  of  qualified  opinion  as  regards 

the  injurious  effects  of  the  system  upon  the  medical  profession.     The 

minority  report  points  out  in  this  connection  that — 

The  amendment  will  destroy  medical  freedom  and  progress.  It  will  make 
the  physician  and  his  treatment  subject  to  the  whim  of  poHtician  and  patient 
alike.  It  will  kill  medical  advance  by  removing  from  the  physician  incentive 
to  individual  work  and  lessen  the  future  number  of  scientilic  medical  men, 
because  there  will  be  no  inducement  to  enter  such  a  demoralized  and  degraded 
profession. 

In  conclusion,  the  minority  members  of  the  Committee  point  out 
that — "The  suggested  plan  of  social  insurance  leaves  everything  in  the 
air.  No  one  can  tell,  on  the  information  we  have,  who  will  be  aflFected, 
what  the  benefits,  or  what  the  cost." 

74 


This  statement  is  fully  confirmed  by  the  history  of  the  British  act 
during  the  last  seven  years  and  the  present  chaotic  condition  of  British 
legislation,  which  may  be  summarized  in  the  statement  that  the 
changes  in  rules  and  regulations  are  so  frequent  and  so  numerous  that 
no  one  is  in  a  position  to  express  a  final  view  on  all  that  is  involved  in 
this  species  of  legislation.  The  British  act  has  been  amended  a  num- 
ber of  times,  but  particularly  so  in  1913  and  1918,  equivalent  to  a  re- 
casting of  very  important  and  far-reaching  provisions  of  the  law. 
Questions  are  frequently  asked  in  Parliament  as  regards  the  intention 
of  the  Government  to  bring  up  a  bill  for  the  complete  reorganization  of 
the  system,  or  its  possible  amalgamation  with  unemployment  insur- 
ance, so  that  all  contributions  may  be  uniform  and  paid  on  a  single 
card,  with  the  consequent  elimination  of  innumerable  bureaus,  de- 
partments, and  divisions  of  various  kinds. 

The  first  extended  argument  presented  to  the  Club  at  the  meeting 
referred  to  was  by  Mr.  Chester  H.  Rowell,  chairman  of  the  California 
Social  Insurance  Commission.  Mr.  Rowell  offered  the  proposed 
measure  as  "a  real  remedy  for  a  real  evil,"  supported  by  alleged /ac/5 
which,  as  has  been  previously  pointed  out,  are  mostly  fallacies  and 
obviously  such  in  the  light  of  the  experience  which  has  been  had  in 
foreign  countries.  Mr.  Rowell  summed  up  the  ten  provisions  of  the 
proposed  law  in  the  statement  that — 

Whenever  anj-  emplo^-ee  is  sick  he  will  reelieive,  after  the  first  week,  two- 
thirds  of  his  wages,  and  he  will  receive  for  himself  or  for  any  member  of  his 
family  that  is  sick  all  of  the  medical  care  he  needs.  That  means  the  care  of 
physicians,  it  means  the  consultation  of  experts,  of  speciaHsts,  it  means 
hospital  bills  if  he  needs  them,  it  means  maternity  benefits  when  there  is  a 
child  bom  in  his  family,  it  means  a  small  funeral  benefit  when  there  is  a 
death  in  his  family.  It  means  the  things  that  we  all  have  to  have  when  we 
are  sick,  and  which  a  good  many  have  to  get  from  charity. 

Mr.  Rowell,  however,  did  not  bring  forward  evidence  from  any 
trustworthy  source  that  the  proposed  benefits  could  be  realized  in  re- 
turn for  the  proposed  contribution,  not  exceeding,  as  pointed  out  in 
the  majority  report,  a  total  of  four  per  cent,  of  the  wages.  The  cost 
of  every  benefit  offered  is  purely  a  matter  of  conjecture,  but  abundant 
experience  abroad  has  shown  that,  once  in  operation,  a  system  of  com- 
pulsory health  insurance  tends  persistently  to  increase  in  cost  out  of 
all  proportion  to  the  contributions  paid. 

In  an  argument  against  the  arriendment,  Mr.  Marshall  Stimson,  a 
member  of  the  Club,  directed  attention  to  the  fact  that  in  Great  Britain 
"There  was  a  class  condition  that  made  it  necessary  for  her  to  have 
some  palliative  measure  of  that  kind  to  relieve  labor.  If  England, 
after  the  wonderful  spiritual  birth  that   she  has  had  now,  had  that 

75 


(liicstion  to  decide  over  again,  I  do  not  think  she  would  take  it."  The 
(lifliciilty  in  Ivn^land  is  one  of  long  standing,  due  to  the  pernicious 
results  of  the  poor-law  of  1601,  not  remedied  by  the  reform  legislation 
of  1834.  A  condition  of  chronic  pauperism  in  Great  Britain  is  accen- 
tuated by  intolerable  conditions  of  housing  and  the  chronic  malnutri- 
tion of  a  considerable  proportion  of  the  working  people.  Instead  of 
removing  the  causes  or  conditioning  circumstances  that  give  rise  to 
poverty  and  pauperism  and  lead  to  a  higher  standard  of  life,  the  legis- 
lation of  1911  merely  served,  as  pointed  out  by  Mr.  Stimson,  as  a 
palliative  measure  which  has  failed  completely  to  bring  about  the 
improvement  in  health  and  material  wellbeing  anticipated  by  Mr. 
Lloyd  George  and  others  who  followed  the  German  example  in  the 
enactment  of  a  law  primarily  intended  to  stem  the  rising  tide  of 
social  discontent. 

Equally  to  the  point  is  the  statement  by  Mr.  Stimson  with  refer- 
ence to  German  social  insurance  legislation,  that  "It  took  out  of  the 
German  workingman  self-rehance  and  self-dependence."  Anyone 
familiar  with  the  change  in  German  character  during  the  last  thirty 
>ears  may  find  in  the  social  insurance  legislation  in  part  at  least  an 
explanation  of  the  wrongful  conduct  of  the  w^r.  The  German  work- 
ingman had  ceased  to  think  for  himself  and  had  become  the  abject 
tool  of  a  bureaucracy  sustained  by  Prussian  militarism,  with  the  sole 
objective  of  giving  furtherance  to  the  world  ambitions  of  the  late 
emperor,  William  II,  and  the  German  general  staff. 

Mr.  Lloyd  George,  who  is  largely  responsible  for  the  British  legis- 
lation, has  placed  on  record  his  obligation  to  the  German  experience 
in  the  introduction  to  a  treatise  on  "Insurance  Versus  Poverty,"  by 
I..  G.  Chiozza  Money,  M.  P.,  in  the  following  suggestive  statement: 

In  Germany  the  inception  of  the  scheme  was  not  unaccompanied  by  dis- 
content, unpopularity,  and  glpomy  prophecies.  Its  success  is  now  trium- 
phant, unquestioned  alike  by  employers  and  employed.  It  was  from  Ger- 
many that  we  who  were  privileged  to  be  associated  with  the  appUcation  of  the 
principle  to  the  United  Kingdom  found  our  first  inspiration,  and  it  is  with  her 
experience  before  us  that  we  feel  confident  of  the  future. 

Mr.  Lloyd  George,  however,  never  concerned  himself  with  views  to 
the  contrary,  did  not  examine  into  the  existing  body  of  facts,  but 
readily  permitted  himself  to  be  deceived  by  a  cleverly  conducted 
jiropaganda  in  the  furtherance  of  German  industrial  ambitions. 

Mr.  Stimson  also  directed  attention  to  the  fact  that  "an  enormous 
bureaucratic  machine"  wouM  come  into  existence,  and  this,  in  very 
truth,  has  been  the  experience  in  England  and  on  the  Continent,  so 
much  so  that  tens  of  thousands  of  employees  are  required  to  carry  on  a 
largely  unnecessary  system  of  pretended  insurance,  mostly  at  low 

76 


wages,  or  at  least  at  a  rate  of  compensation  out  of  all  proportion  to  the 
technical  value  of  the  services  required.  For,  whatever  view  one  may 
hold  concerning  the  necessity  of  social  insurance,  it  is  but  fair  to  say 
of  those  who  administer  the  act  in  Great  Britain,  and  corresponding 
acts  on  the  continent  of  Europe,  that  the  higher  grade  of  civil  service 
employees  are,  almost  without  exception,  men  of  exceptional  ability, 
patriotically  devoted  to  their  always  arduous  and  exacting  duties. 

In  concluding  a  strong  argument  against  the  proposed  legislation  in 
the  State  of  California,  Mr.  Stimson  took  occasion  to  say  that,  "The 
fundamental  fact  stands  out  paramount  that  social  insurance  cannot 
remove  or  prevent  poverty.  It  does  not  get  at  the  cause  of  social  injus- 
tice." The  evidence  of  English  poor-law  officials  is  practically  unani- 
mous that  national  health  insurance  has  not  been  the  means  of  dimin- 
ishing the  demand  for  poor-relief.  The  poor-rate  throughout  England  is 
increasing  and  in  some  localities  has  reached  intolerable  proportions. 
The  pecuniary  relief  guaranteed  in  the  event  of  sickness,  at  the  rate 
of  ten  shillings  a  week,  is  out  of  all  proportion  to  the  normal  needs  of  a 
wage-earner's  family  not  dependent  upon  charity  or  public  aid.  The 
demand,  therefore,  is  persistent  that  the  amount  be  doubled,  which, 
however,  is  quite  out  of  the  question  in  view  of  corresponding  de- 
mands for  an  increase  in  the  value  of  other  benefits,  aside  from  per- 
sistent demands  for  an  increase  in  the  allowance  for  administration 
expenses  on  the  part  of  approved  societies  and  for  the  better  re- 
muneration of  employees,  insurance  committees,  etc. 

Mr.  Peter  V.  Ross,  a  member  of  the  minority  signatory  to  the  re- 
port of  the  Social  Insurance  Committee  of  the  Commonwealth  Club 
of  California,  in  his  address,  took  occasion  to  point  out  the  fallacies  of 
the  Commission's  propaganda — "propaganda,  by  the  way,  carried  on 
with  public  funds  and  in  a  spirit  of  bitter  partisanship  instead  of  that 
impartial  investigation  for  which  the  commission  has  been  created  and 
financed  by  the  people."  There  is  probably  no  more  deplorable  illus- 
tration of  the  perversion  of  high  legislative  functions  than  the  work  of 
the  Social  Insurance  Commission  of  California  in  making  propaganda 
for  a  social  insurance  amendment,  instead  of  concerning  itself  exclu- 
sively with  the  truth  and  the  facts  as  required  by  the  legislature  in  its 
efforts  to  arrive  at  an  impartial  conclusion  concerning  the  merits  of 
the  proposition  under  consideration. 

Mr.  Rowell,  in  closing  the  discussion,  took  occasion  to  state  that 
"the  statistics  indicate  that  the  amount  of  fraud  and  malingering 
found  in  Germany  cannot  have  been  large,  and,  according  to  the 
British  reports,  which  are  more  accessible  now,  the  British  experience 
is  to  the  effect  that  fraud  and  malingering  are  exceedingly  small." 

77 


But  Mr.  Rowcll  evidently  was  entirely  without  definite  information 
on  the  subject,  for  every  report  of  the  German  local  sick  funds  em- 
phasizes the  evil  of  malingering  and  imposition,  so  much  so  that  it 
is  not  going  too  far  to  say  that  fifty  per  cent,  of  the  cases  investigated, 
claiming  sick  pay,  were  found  to  be  fully  able  to  return  to  work.  The 
same  lamentable  condition  has  been  disclosed  by  the  medical  referees 
in  the  United  Kingdom.* 

It  is  a  wrongful  statement  to  assert  that  the  proportion  of  fraud  and 
malingering  in  Ivngland's  experience  is  exceedingly  small.  The  truth 
about  the  matter  is  that  the  facts  defy  analysis.  The  term  "incapacity 
for  work"  in  English  law  is  not  definite  or  practically  definable.  An 
enormous  amount  of  treatment  is  required  for  minor  ailments  in- 
volving prolonged  absence  from  work  to  secure  at  least  one  week's 
sick  benefit,  which,  under  the  proposed  California  legislation  would  be 
extended  to  two  weeks,  since  nothing  is  payable  during  the  first  seven 
days.     Mr.  Rowell  concludes  his  argument  with  the  statement  that : 

Anyone  who  has  studied  the  British  system  for  four  minutes  will  know 
that  there  is  already  in  complete  operation  there  a  system  which  infallibly 
collects  all  the  fees,  practically  without  expense,  without  intrusion,  without 
police,  by  taking  it  from  the  pay-check  before  it  is  given  out,  through  a 
stamp  system.  In  the  twenty  seconds,  however,  left  I  cannot  go  into  the 
details  of  the  stamp  system.  We  do  not  need  to  worry  about  it.  We  can 
borrow  it  ready  made  from  the  British  experience. 

This  statement  is  perhaps  the  most  misleading  of  all  and  it  is 
difficult  to  believe  that  it  was  not  made  in  complete  ignorance  of  the 
facts.  As  chairman  of  the  Social  Insurance  Committee,  Mr.  Rowell  had 
exceptional  access  to  sources  of  information  which  should  have  made  it 
clear  to  him  that  the  expense,  for  illustration,  has  been  very  con- 
siderable— so  much  so  as  to  prove  a  very  material  burden  to  the 
English  taxpayer.  The  facts  in  the  case  have  frequently  been  pre- 
sented to  Parliament,  although  never  in  a  form  to  be  entirely  con- 
clusive. For  England  and  Wales  for  illustration,  for  the  year  1918,  the 
administration  expenses  are  given  as  £2,634,000  ($12,801,000)  but  this 
statement  falls  far  short  of  the  truth  since  it  is  exclusive  of  the  ex- 
penses of  the  Post  Office  and  the  audit  departments,  etc.,  employed  in 
connection  with  the  administration  of  the  act. 

Nor  is  it  true  that  the  collection  of  the  contributions  is  made 
without  police  interference,  for  there  is  hardly  a  week  during  which 
somewhere  in  the  United  Kingdom  some  one  is  not  subject  to  prosecu- 
tion for  nonpayment  of  the  contribution,  for  the  non-aflfixing  of  stamps 
to  insurance  cards,  or  fraud  in  connection  therewith,  etc.     The  con- 

•See  my  discussion.  "Failure  of  German  Compulsory  Health  Insurance — A  War  Revelation," 
read  before  the  .\ssociation  of  Life  Insurance  Presidents.  New  York.  December  6,  1918. 

78 


eluding  sentence  in  the  remarks  of  Mr.  Rowell — "We  can  borrow  it 
ready  made  from  the  British  experience" — is  but  a  paraphrase  of  the 
words  of  Mr.  Lloyd  George  with  reference  to  the  British  act  being 
borrowed  practically  in  its  entirety,  and  in  all  important  matters  of 
detail,  from  Germany. 

It  is  something  very  considerably  to  the  credit  of  the  members  of 
the  Commonwealth  Club  of  California  that  they  should  not  have 
permitted  themselves  to  be  swayed  by  plausible  arguments  based  upon 
sentimentality  and  guesswork  opinion,  but  that  they  gave  prior  con- 
sideration to  the  interests  of  the  State  of  California,  as  represented 
by  a  vote  of  88  opposed  to  the  amendment,  and  only  29  members 
voting  in  its  favor. 


79 


RKPORT  OF  THE  WISCONSIN  SPECIAL  COMMITTEE 
ON  SOCIAL  INSURANCE,  JANUARY,  1919.* 

The  State  of  Wisconsin  has  every  reason  to  feel  proud  of  the  work 
of  its  Committee  on  Social  Insurance.  The  report  is  a  concise,  well- 
reasoned  argument,  deserving  a  nation-wide  appreciation.  With 
admirable  clearness  the  report  presents  in  broad  outline  the  essential 
questions  involved  in  the  controversy  as  to  whether  social  insurance 
is  desirable  as  a  matter  of  state  policy,  or  otherwise.  Following  a 
restatement  of  the  resolution  authorizing  the.  committee  and  a  repro- 
duction of  the  Act  authorizing  the  investigation — in  connection  with 
which  it  may  be  pointed  out  that  only  five  thousand  dollars  was  ap- 
propriated for  expenses — the  committee  restates  briefly  the  principles 
of  proposed  legislation  and  the  position  of  both  the  affirmative  and  the 
negative,  followed  by  a  summary  statement  of  the  work  of  the  com- 
mittee, in  connection  with  which  it  is  said  that  "This  committee,  early 
in  its  deliberations,  concluded  that  it  must  confine  its  labors  to  certain 
phases  of  social  insurance  only,  if  it  was  to  arrive  at  any  tangible  re- 
sults." The  committee,  therefore,  concentrated  upon  health  insurance 
and  matters  pertinent  thereto,  the  members  stating  that  "Their  only 
aim  was  to  properly  inform  themselves  as  to  the  measure  and  to  give 
careful  consideration  to  every  opinion  expressed,  and  to  weigh 
with  equal  judgment  all  evidence  presented  by  the  various  groups 
interested."  The  conclusion  advanced  is  that  "But  few,  even  of  the 
more  interested  groups,  have  given  the  subject  any  serious  attention 
and  are,  therefore,  uninformed,  or  at  least  meagerly  informed,  on  the 
more  important  considerations  involved." 

This  statement  is  absolutely  correct  and  to  the  point.  Regardless 
of  an  enormous  amount  of  mere  hearsay  evidence  and  belief  as  regards 
certain  anticipated  benefits  or  results,  it  cannot  be  said  that  those  who 
are  most  strongly  in  favor  of  compulsory  health  insurance  have  ad- 
vanced their  cause  by  a  single  contribution  worthy  of  serious  thought. 
It  is  to  the  credit  of  the  Wisconsin  committee  that,  at  least  within  the 
limits  of  its  legal  appropriation,  it  made  an  effort  to  ascertain  real  facts 
and  secure  real  information  concerning  the  health  and  well-being,  and 
most  of  all  the  health  insurance  needs,  of  the  people  of  Wisconsin. 
The  committee  report  states  that  "In  order  to  determine  whether  the 
wage-earners  of  the  State  need  compulsory  health  insurance,  the  com- 

♦Thissectionon  Wisconsin  was  originally  contributed  torA<5^c<:/a<or  of  New  York,  April  17,  1919. 

80 


mittee  has  set  forth  its  findings  under  various  titles,  showing  as  far  as 
possible  the  present  financial  condition  of  the  workers,  the  different 
agencies  now  being  operated  to  prevent  illness  and  the  extent  to  which 
sickness  insurance  is  now  in  force  in  this  State." 

By  way  of  introduction,  a  brief  survey  is  presented  of  the  wage- 
earners  of  Wisconsin,  their  earnings,  occupational  distribution,  etc. 
The  report  observes  that  "It  is  perhaps  reasonable  to  hold  that  the 
people  of  no  other  State  are  more  industrious  and  thrifty  than  those  of 
Wisconsin,"  and  that  "In  dealing  with  the  subject  of  compulsory 
health  insurance  we  are,  of  course,  exclusively  concerned  with  the  wage- 
earners  of  the  cities  and  villages  of  the  State.  If  their  habits  of  thrift 
and  independence  are  in  part  indicated  by  the  character  of  the  homes 
they  have  built  for  themselves,  they  are  also  measured  in  the  figures 
presented  by  the  building-and-loan  associations,  savings  banks  deposits 
and  postal  savings."  By  thus  directing  attention  to  what  the  wage- 
earners  of  Wisconsin  have  done  and  how  successful  have  been  their 
efforts  on  a  basis  of  voluntary  thrift  and  through  voluntary  associated 
agencies,  the  committee  squarely  opposes  the  methods  of  socialistic 
propagandists  by  directing  attention  only  to  the  failures  and  to  what 
has  not  been  done,  but  which  may  be,  after  all,  but  a  matter  of  minor 
consideration. 

Briefly  reviewing  the  different  methods  of  voluntary  thrift,  as  em- 
phasized through  building-and-loan  associations,  savings  banks,  home 
ownership,  establishment  insurance,  the  committee  refers  to  group 
insurance,  intimating  that,  according  to  the  best  information  available, 
approximately  10  per  cent,  of  the  factory  wage-earners  in  Wisconsin 
are  protected  by  policies  of  this  kind.  The  report  states  that  four  in- 
surance companies  out  of  six  writing  group  insurance  in  Wisconsin 
report  the  aggregate  of  such  insurance  in  force  on  December  1,  1918, 
as  follows: 

Number  of  group  policies 57 

Number  of  persons  insured 17,262 

Amount  of  insurance $12,131,249 

This  form  of  social  progress,  it  must  be  considered,  being  of  very 
recent  origin,  is  not,  of  course,  as  yet  developed  to  anything  like  the 
extent  to  be  anticipated  in  the  near  future.  It,  however,  is  gratifying 
to  note  that  $12,000,000  of  such  insurance  should  have  been  placed 
voluntarily  upon  the  lives  of  wage-earners  in  the  State  of  Wisconsin 
by  far-sighted  employers,  in  response  to  an  altruistic  sentiment, 
dictated  by  unselfish  considerations. 

81 


Labor-unions  and  fraternal  insurance  societies  transact  a  consider- 
able amount  of  sickness  insurance,  but  the  investigations  into  these 
activities  were  not  complete,  since  returns  are  not  required  to  be  made 
to  the  Insurance  Commissioner  or  to  any  other  state  official.  This 
much,  however,  is  made  clear,  that  the  actual  needs  of  the  people  for 
such  insurance  are  adequately  met  by  organizations  of  this  kind. 
The  committee  estimates  that  the  total  amount  paid  annually  by  trade- 
unions  and  fraternal  organizations  is  probably  more  than  $100,000. 
And  it  is  estimated,  further,  that  some  thirty-six  organizations  transact 
sickness  insurance,  forty  transact  accident  insurance  and  thirty-nine 
transact  death  and  funeral  insurance. 

Those  who  make  light  of  these  comparatively  unimportant  eco- 
nomic results  of  voluntary  effort  overlook  the  fact  that  the  real  neces- 
sity for  such  needs  is  invariably  met  by  some  form  or  other  of 
voluntary  organization.  In  other  words,  to  the  extent  that  health 
insurance  is  really  required,  it  may  safely  be  assumed  that  adequate 
facilities  have  been  developed,  whether  on  a  trade-union  basis  or  in  the 
form  of  private  or  commercial  enterprise.  In  this  country,  where  sick- 
ness is  comparatively  rare  and  of  rather  short  duration,  its  economic 
importance  is  decidedly  less  than  in  European  countries.  In  Europe 
even  the  loss  of  a  few  days'  wages  may  spell  ruin  to  an  unfortunate 
workman,  living  on  the  narrow  edge  of  poverty  and  pauperism.  In 
this  country  the  economic  losses  in  consequence  of  sickness  are  among 
the  mass  of  our  wage-earners  much  more  easily  made  good  out  of  sur- 
plus earnings  or  through  the  use  of  the  credit  function,  leaving,  there- 
fore, a  much  lesser  necessity  for  either  voluntary  health  insurance  or 
health  insurance  on  a  compulsory  plan. 

Following  a  reasonably  thorough  consideration  of  the  question  of 
insurance  in  its  voluntary  aspect,  the  committee  takes  up  in  some 
detail  such  problems  as  climate  and  health,  housing  and  sanitation, 
dependency  and  poor-relief,  etc.  On  the  basis  of  such  information  as 
it  could  secure,  the  committee  estimates  the  probable  cost  of  compul- 
sory health  insurance  in  the  State  of  Wisconsin  to  be  $20,000,000  per 
annum,  of  which,  respectively,  $8,000,000  would  be  paid  by  employers, 
$8,000,000  by  the  wage-earners  and  $4,000,000  by  the  tax-payers  of 
the  State. 

With  rather  unusual  courage  the  committee  takes  up  the  question 
of  organized  labor  and  its  endorsement  of  the  principles  of  health  in- 
surance. "It  seems  to  the  committee,"  says  the  report,  "that  labor 
in  the  State  of  Wisconsin  is  not  at  this  time  sufficiently  informed  to 
either  favor  or  oppose  health  insurance."  The  same  may  be  said  to 
be  true  of  practically  all  the  other  interests  which  so  emphatically 

82 


advocate  health  insurance,  chiefly  on  the  basis  of  arguments  provided 
by  the  American  Association  for  Labor  Legislation. 

Reviewing  also  the  employers'  position  and  that  of  the  Christian 
Scientists,  the  committee  takes  up  at  length  the  question  of  state  and 
local  health  boards  and  emphasizes  the  means  by  which  their  utility 
may  be  increased.  The  report  discusses  at  length  the  question  of 
state  sanatoria,  health  work  and  schools,  mortality  among  young  chil- 
dren, amplified  by  observation  on  welfare-work,  occupational  diseases 
and  the  broader  questions  of  health  insurance  and  workmen's  compen- 
sation. No  phase  of  the  question,  perhaps,  has  been  more  deliberately 
misrepresented  than  the  true  relation  of  workmen's  compensation  to 
social  insurance.  Following  the  statement  made  by  vSurgeon  General 
Blue  some  years  ago  that  "Health  insurance  is  the  next  great  step  in 
social  insurance,"  it  has  been  argued  that  because  of  the  success  of 
workmen's  compensation  and  the  earlier  opposition  thereto,  it  is  a 
forgone  conclusion  that  health  insurance  would  prove  equally  satis- 
factory and  become  practically  universal  throughout  the  country,  once 
the  experiment  had  been  tried  in  a  single  State.  The  difference  be- 
tween workmen's  compensation  and  compulsory  health  insurance  is 
emphasized  as  follows: 

The  doctrine  of  workmen's  compensation  naturally  arises  out  of  the  pre- 
existing doctrine  of  employers'  liability.  It  is  not  a  new  doctrine,  but  merely 
a  modified  method  of  providing  a  more  satisfactory  form  of  compensatory 
damages  for  injuries  sustained  in  the  course  of  the  employment.  The  general 
acceptance  of  the  principle  as  a  matter  of  social  justice  rests  upon  the  clear 
recognition  that  cause  and  effect  in  industrial  accidents  are  so  readily  deter- 
minable that,  broadly  speaking,  no  controversy  can  arise  in  a  large  majority 
of  cases.  It,  of  course,  was  necessary  to  abrogate  certain  common-law  de- 
fenses heretofore  considered  permissible  under  the  old  doctrine  of  employers' 
liability,  but  no  one  ever  defended  the  old  system  on  the  principles  of  social 
justice  but  merely  on  the  ground  of  legal  justice  and  validity,  of  course,  until 
modified  by  statutory  enactments. 

In  the  case  of  sickness  insurance  the  situation  is,  broadly  speaking,  com- 
pletely reversed.  With  the  exception  of  occupational  diseases,  no  court  or 
code  has  ever  held  an  employer  responsible  for  the  general  health  of  his  em- 
ployees. The  causes  of  ill-health  are  not  only  extremely  numerous,  but  cause 
and  effect  in  other  than  infectious  diseases  are  generally  remote.  Even 
typhoid  fever,  for  illustration,  may  be  contracted  in  one's  place,  but  the  dis- 
ease may  not  manifest  itself  in  a  serious  form  until  the  person  concerned  has 
gone  to  some  other  place.  As  to  how  most  diseases  are  contracted,  or  when 
they  are  contracted,  it  is  often  impossible  to  determine.  Most  pathologic 
or  degenerative  processes  extend  over  long  periods  of  time.  Even  in  the  case 
of  lung  fibrosis  several  years  may  pass  after  the  initial  damage  has  been  done 
to  the  lungs  before  the  symptoms  are  sufficiently  determinable  to  permit  of 
accurate  diagnosis. 

83 


Upon  the  basis  of  such  well-reasoned  facts  and  considerations,  the 
loniniittcc  conchides  that  it  "has  not  been  convinced  from  the  evidence 
presented  that  there  is  any  necessity  for  such  an  Act  (Compulsory 
Health  Insurance),  for,"  it  says,  "the  wage-earners  of  the  State  are 
on  the  whole  thrifty  and  independent,  and  they  have  not  sought  pater- 
nalistic direction  or  aid  in  their  private  affairs  and  home  life.  We 
believe  that  the  Liberty  Loans  and  the  Thrift-vStamps  campaigns  have 
proved  a  remarkable  development  in  the  savings  habit,  especially 
among  the  wage-earners,  which  will  further  aid  this  group  to  tide  over 
periods  of  sickness." 

As  an  alternative,  it  is  proposed  to  recommend  a  series  of  well-con- 
sidered health  measures,  observing  in  this  connection  "that  if  the  State 
of  Wisconsin  has  not  as  yet  through  proper  legislation  realized  her  own 
responsibilities  in  raising  the  health  standards  of  her  population  to 
their  highest  attainable  point,  then  the  opportunity  to  do  so  is  still 
within  her  grasp."  And  furthermore,  "it  would  seem  wise  to  hold 
that  the  expenditure  of  $1,000,000  for  preventive  measures  will  serve 
the  cause  of  public  health  in  the  State  more  effectively  than  the  ex- 
penditure of  twenty  times  that  sum  in  an  experimental  curative." 
Attention  is  directed  to  the  fact  that  "the  remarkable  results  being 
obtained  in  this  State  by  means  of  preventive  work  inaugurated  by 
the  state  and  local  health  departments  are  more  than  gratifying,  con- 
sidering the  limited  appropriations  available  for  the  purpose."  They, 
therefore,  argue  that  "since  any  compulsory  health  insurance  measure 
which  contemplates  a  contribution  to  the  fund  on  the  part  of  the  State 
will  first  require  a  Constitutional  amendment,  the  committee  in  the 
meantime  offers  the  following  suggestions: 

1.  We  urge  upon  the  Legislature  the  necessity  for  more  liberal  appropria- 
tions for  the  support  of  the  State  Board  of  Health  and  the  encouragement  of 
correspondingly  liberal  appropriations  on  the  part  of  the  local  boards  of  health, 
including  the  appointment  of  a  paid  county  health  oflficer  in  every  county  of 
the  State.  We  also  deem  it  advisable  to  direct  special  attention  to  the  State 
Health  Laboratories,  with  the  hope  that  they  may  be  made  in  the  course  of 
time  centers  of  preventive  medicine  and  become  useful  in  the  possible  future 
development  of  so-called  group  medicine. 

2.  We  urgently  recommend  the  universal  introduction  of  physical  and  medi- 
cal examinations  into  all  the  public  schools  and  other  State  educational  in- 
stitutions in  Wisconsin.  We  have  arrived  at  the  opinion  that  a  reorganized 
State  health  service  must  rest  primarily  upon  adequate  methods  of  child  and 
school  hygiene,  including  the  periodical  physical  and  medical  examination 
of  all  children  during  the  period  of  school  life. 

3.  As  a  means  of  securing  more  adequate  care,  especially  during  prolonged 
illness,  we  are  of  the  opinion  that  the  Legislature  should  give  encouragement 

84 


to  the  establishment  of  district  nursing  centers  of  various  types  best  adapted 
to  local  requirements. 

4.  The  reduction  of  infant  mortality  should  be  made  a  part  of  the  public 
health  programme,  and  we  recommend  that  a  bureau  of  child  welfare  be  estab- 
lished in  connection  with  the  present  State  health  organization. 

5.  The  Legislature  also  should  give  liberal  encouragement  to  the  develop- 
ment of  financial  community  support  of  hospitals  and  sanatoria,  as  most 
urgently  called  for  by  local  conditions,  subject,  of  course,  to  wise  variation 
throughout  the  State.  We,  however,  feel  that  every  county  should  have  not 
less  than  one  thoroughly  equipped  modern  hospital  for  general  purposes. 

6.  While  our  investigations  have  not  disclosed  very  serious  deficiencies  in 
the  housing  of  our  wage-earners,  we  are  of  the  opinion,  nevertheless,  that  the 
Legislature  should  provide  for  the  adoption  of  a  comprehensive  housing  plan 
adapted  to  the  future  needs  of  our  growing  industrial  population.  The  rela- 
tion of  ill-health  to  unsanitary  methods  of  housing  is  so  clearly  established  that 
it  requires  no  arguments  to  reemphasizc  the  urgency  of  this  recommendation 
by  an  appeal  to  the  facts,  which  are  understood  by  all  who  have  given  the 
matter  serious  consideration. 

7.  We  are  of  the  opinion  that  occupational  diseases  should  be  included  in 
the  Workmen's  Compensation  Act  and  recommend  that  proper  legislation  to 
this  end  be  enacted.* 

8.  Finally,  we  would  recommend  that  the  State  Insurance  Department 
concern  itself  more  actively  with  the  supervision  and  control  of  voluntary 
insurance  undertakings  having  for  their  object  the  pecuniary  relief  or  medical 
attendance,  or  both,  of  wage-earners  during  more  or  less  prolonged  periods  of 
illness.  It  seems  to  us  that  a  standardized  plan  of  organization  and  procedure 
might  be  worked  out  under  the  direction  of  the  Insurance  Commissioner  and 
recommended  to  the  wage-earners  of  the  State,  as  well  as  to  the  employers 
of  labor,  for  individual  or  collective  adoption. 

These  recommendations  will  commend  themselves  to  any  impartial, 
critical  observer  as  convincingly  sound  and  to  the  point.  They  are  in 
conformity  with  our  American  theories  of  government  and  are  both 
practical  and  constructive.  If  carried  out,  even  in  part,  the  benefits 
to  the  people  of  Wisconsin  should  be  far-reaching  and  profound.  The 
world  of  insurance  is  under  a  lasting  obligation  to  the  committee  for 
its  sane  and  wise  conclusion  on  the  function  of  voluntary  thrift  in  the 
domestic  economy  of  the  American  wage-earners  and  for  its  uncom- 
promising hostility  to  ill-considered  schemes  and  plans  of  socialistic 
change,  in  a  field  in  which  even  the  best  informed  may  well  proceed 
with  extreme  caution.  The  report  should  be  read  with  unusual  care 
by  all  who  are  interested  not  only  in  insurance,  but  also  in  the  larger 
problems  of  national  health  and  well-being. 

♦The  Legislature  of  Wisconsin  promplly  passed  an  amendment  to  the  Workmen's  Compensation 
Act  to  include  occupational  diseases,  which  amendment  hecanic  elTeclive  July  30.  1919.  The  prompt- 
ness of  this  action  illustrates  the  manner  in  which  far-reaching  improvements  in  industrial  relations 
may  be  brought  about  without  the  elaborate  and  costly  machinery  required  for  Compulsory  Health 
Insurance. 

85 


The  recommendations  made  by  the  committee  deserve  the  most 
thoughtful  consideration  on  the  part  of  each  and  every  State,  since  they 
arc  appHcable,  not  only  to  Wisconsin,  but  to  the  nation  at  large.  It 
should  be  said,  in  conclusion,  that  the  report  is  signed  by  W.  W. 
Albers,  chairman,  Theo.  Benfey,  W.  L.  Smith,  and  John  P.  Donnelly, 
secretary,  members  of  the  Special  Committee  on  Social  Insurance.* 

♦In  marked  contrast  to  the  sane  and  conservative  views  of  the  Wisconsin  Committee  on  Social 
Insurance  arc  the  erratic  theories  advanced  by  Prof.  John  R.  Commons,  of  the  University  of  Wisconsin, 
in  an  address  on  "A  Reconstruction  Health  Program,"  delivered  at  the  fifteenth  annual  meeting  of  the 
National  Tuberculosis  Association.  There  is  nothing  to  indicate  that  the  address  has  any  direct  bear- 
inK  upon  the  tuberculosis  problem,  being  merely  a  restatement  of  misleading  views  and  fallacies  on  the 
subject  of  health  insurance.  For  illustration:  Professor  Commons  remarks  that  "It  is  a  curious  fact 
that  our  insurance  experts,  who  try  to  prove  to  us  that  the  purpose  of  insurance  is  not  prevention  but 
relief,  wish  to  turn  over  the  prevention  of  sickness  in  industry  not  to  our  business  men  who  control  the 
industry,  but  to  our  politicians."  A  more  absurd  suggestion  has  not  been  advanced  by  any  one  making 
propaganda  for  health  insurance.  .A.11  insurance  has  for  its  primary  and  essential  purpose  the  payment 
of  losses,  and  prevention  is  necessarily  only  a  secondary  function,  entirely  missing  in  many  if  not  most 
forms  of  insurance  properly  conducted  as  a  matter  of  private  business  enterprise.  Just  as  Professor 
Commons  deliberately  perverts  the  true  function  of  insurance,  he  would  pervert  the  function  of  health 
administration.  The  duty  and  responsibility  for  sanitary  reform  does  not  rest  upon  business  people 
but  upon  the  Government,  and  vague  theories  and  misleading  views  can  only  prove  productive  of 
serious  harm.  It  is  typical  of  the  modern  socialist,  however,  that  he  is  fatuously  indifferent  to  the 
facts. 

Professor  Commons  has  not  qualified  as  an  expert  in  either  insurance  or  public  health,  but  it 
might  be  expected  of  him  that  he  should  have  sound  theories  of  economics.  To  argue  that  "Our  wealth 
is  not  in  our  resources  and  climate  but  in  the  coming  men  and  women,"  and,  that  "the  doctor  is  our 
greatest  producer  of  wealth,"  is  argument  carried  to  the  point  of  ridicule.  Anyone  familiar  with  ele- 
mentary economics,  even  though  not  much  more  than  a  high  school  graduate,  knows  that  wealth  in  the 
true  sense  is  material  and  not  personal.  In  the  words  of  Professor  Seligman.  "Health  is  not  wealth 
although  it  may  be  the  basis  of  wealth;  wealth  exists  for  man,  but  man  himself  is  not  wealth;  wealth 
may  be  produced  by  man  but  it  is  the  product,  not  the  producer,  that  constitutes  wealth." 

Thus  the  learned  professor  disqualifies  himself  not  only  as  an  expert  in  insurance  and  public 
health  but  also  in  economics,  which  he  is  supposed  to  teach  to  university  students  seeking  for  the  truth. 
The  cause  of  health  insurance  is  not  advanced  by  the  reckless  utterance  of  platitudes  and  absurdities, 
plainly  in  contrast  to  the  truth  and  the  facts  of  human  experience. 


86 


REPORT  OF  THE  CONNECTICUT  COMMISSION  ON  PUBLIC 
WELFARE,  JANUARY,  1919. 

Under  date  of  January  18,  1919,  a  report  was  submitted  to  the 
General  Assembly  of  the  State  of  Connecticut  by  the  Commission 
on  Public  Welfare,  which  had  been  appointed  under  an  act  approved 
by  the  Governor  on  April  19,  1917,  and  amended  under  date  of  May 
3,  1917,  to  include  the  subject  of  occupational  diseases.  The  report 
of  this  commission  is  most  interesting,  inclusive  of  not  only  the  subject 
of  health  insurance  but  also  hours  of  labor  and  minimum  wages,  old- 
age  pensions,  mothers'  pensions,  and  occupational  diseases.  Although 
required  to  investigate  a  large  number  of  subjects  not  at  all  related  to 
one  another,  the  commission  wisely  limited  itself  chiefly  to  the  subject 
of  health  insurance  as  a  matter  which  had  been  brought  most  promi- 
nently before  the  public,  furthered  and  fostered  by  the  propaganda 
initiated  and  maintained  practically  exclusively  by  the  American 
Association  for  Labor  Legislation.  The  commission  enumerates  seven- 
teen specific  advantages  which  it  is  claimed  would  accrue  from  the 
adoption  of  a  system  of  compulsory  health  insurance,  and  fifteen  disad- 
vantages presented  by  those  who  are  opposed  to  a  compulsory  system 
in  any  forrr:.  Among  the  arguments  advanced  in  favor  of  compulsory 
health  insurance,  mention  may  be  made  of  the  assertion  that  such  a 
system  "will  make  complete  medical  care  available  to  all  wage-earners, 
their  wives  and  children,"  and  "will  protect  all  wage-earners,  including 
those  who  would  otherwise  lack  the  means  or  the  foresight  to  insure." 
This  has  not  been  the  case  under  any  system  of  social  insurance. 
Under  the  English  system  of  national  health  insurance  large  numbers 
who  are  not  technically  wage-earners,  but  who  are  certainly  a  labor 
element  perilously  near  to  the  poverty  line,  are  not  at  present  efTectively 
and  adequately  protected,  simply  because  of  the  fact  that  either  no 
contributions  are  paid,  or  the  contributions  made  as  deposit  contribu- 
tors are  insufficient  for  the  purpose.  It  is  equally  absurd  to  argue 
that  a  ''complete  medical  service"  is  made  available  to  all  wage- 
earners,  for,  as  a  matter  of  fact,  even  under  the  British  system,  as 
abundantly  shown  by  Dr.  William  A.  Brend  in  "Health  and  the 
State,"  the  medical  attendance  is  below  the  average  and  frequently 
decidedly  mediocre  and  even  thoroughly  imsatisfactory.  To  furnish 
complete  medical  care,  including  under  that  term  specialized  services 
and  special  appliances,  frequently  exceedingly  expensive,  dental  care, 

87 


etc.,  involves  an  expenditure  which  can  not  possibly  be  met  by  the 
joint  conlrihiitions  raised  at  the  present  time  under  any  system  of 
social  insurance  paid  for  jointly  by  employers,  employees,  and  the 
State.  Furthermore,  in  Great  Britain,  wives  and  children  are  not 
included,  and  altliou;,di  these  have  been  provided  for  in  the  so-called 
standard  hills  introduced  into  the  legislatures  of  the  several  States  at 
the  request  of  the  American  Association  for  Labor  Legislation,  no  data 
exists,  nor  is  any  information  available,  which  would  enable  a  pro- 
fessional actuary  to  estimate  with  approximate  accuracy  the  probable 
cost  of  such  a  system  under  whatever  method  of  administration  might 
be  adopted.  There  is  no  alternative  but  a  state  medical  service  as 
the  only  practical  solution  in  that  the  enormous  cost  of  a  highly  com- 
plex and  extremely  burdensome  system  of  insurance  is  avoided. 

Among  other  arguments  it  is  said  that  compulsory  health  insurance 
"will  for  the  first  time  provide  a  body  of  accurate  statistics  on  the 
nature  and  extent  of  sickness."  This,  broadly  speaking,  has  not  been 
the  case  in  Germany,  nor,  for  that  matter,  in  England,  and,  as  clearly 
brought  out  by  Dr.  Brend  in  his  work  "Plealth  and  the  State,"  the 
results  of  statistical  inquiries  of  this  kind  would  be  obtained  only  at 
very  considerable  expense  out  of  all  proportion  to  the  practical  results 
to  be  derived  therefrom.  In  fact,  in  many  cases  the  conclusions  would 
be  more  likely  to  be  misleading  than  useful  for  the  purposes  of  an 
otherwise  thoroughly  efficient  public  health  administration. 

Equally  misleading  is  the  argument  of  those  who  are  making 
propaganda  for  compulsory  health  insurance,  that  such  a  system 
would  "tend  to  reduce  lost  time  and  labor  turnover  due  to  prolonged 
cases  of  sickness."  As  a  matter  of  fact,  and  as  shown  by  trustworthy 
experience,  every  system  of  social  insurance  tends  strongly  in  the 
direction  of  an  increase  in  loss  of  labor  time  due  to  malingering  and 
feigned  sickness,  particularly  during  periods  of  unemployment.  The 
fact  has  been  brought  out  for  certain  districts  of  England  that,  under 
a  method  of  medical  referees,  or  one  in  which  patients  are  carefully 
re-examined  to  ascertain  actual  incapacity  for  work  as  a  prerequisite 
for  the  payment  of  sickness  claims,  about  sixty  per  cent,  were  found 
to  be  fully  able  to  work.  Quite  to  the  contrary,  every  system  of 
social  insurance  increases  the  difficulties  of  the  labor  turnover  and 
diminishes  industrial  efficiency  by  reducing  normal  labor  time. 

Of  the  arguments  opposed  to  compulsory  health  insurance,  per- 
haps the  most  suggestive  is  the  last  made  mention  of  by  the  commis- 
sion, to  the  effect  that  such  a  system  "does  not  sufficiently  emphasize 
prevention  of  disease."  All  social  insurance  more  or  less  hinders 
sanitary  progress  in  that  it  results  in  apathy  and  indifference  to  any 

88 


and  all  health-promoting  activities  because  of  the  fact  that  a  premium 
is  paid  on  voluntary  absence  from  work  or  the  exaggeration  of  slight 
ailments  converted  into  prolonged  periods  of  alleged  illness. 

Reviewing  carefully  and  impartially  the  arguments  advanced  for 
and  against  compulsory  health  insurance,  largely  on  general  grounds, 
but  theoretical  rather  than  practical,  the  commission  concludes  that: 

Both  the  supporters  and  the  opponents  of  the  compulsorj'  principle  have 
appealed  for  support  to  the  results  of  compulsory  health  insurance  in  England 
under  the  National  Insurance  Act  adopted  in  1911  but,  although  the  argu- 
ments for  and  against  are  interesting,  they  have  not  brought  conviction  to  the 
minds  of  the  Commission  for  the  reason  that  sufficient  time  had  not  elapsed 
between  the  enactment  of  the  law  and  the  entrance  of  the  English  people  into 
war  with  Germany  to  furnish  a  sufficient  volume  of  dependable  experience, 
and  the  living  and  industrial  conditions  in  England  since  her  entrance  into 
the  war  have  been  so  abnormal  that,  if  completed  data  during  this  period 
were  obtainable,  it  would  not  furnish  a  safe  guide. 

The  commission  quotes  Mr.  Samuel  Gompers,  president  of  the 
American  Federation  of  Labor,  Warren  S.  Stone,  Grand  Chief  of  the 
International  Brotherhood  of  Locomotive  Engineers,  Hugh  Frayne, 
Organizer  of  the  American  Federation  of  Labor,  and  other  nationally 
prominent  labor  leaders,  as  having  recorded  their  views  against  com- 
pulsory health  insurance.  We,  however,  call  attention  to  the  fact 
that  the  State  Federation  of  Labor  of  New  York,  which  at  first  opposed 
compulsory  health  insurance,  subsequently  presented  a  bill,  which 
has  not  become  a  law. 

Referring  to  the  opposition  of  Connecticut  industries,  the  com- 
mission points  out  that: 

All  of  the  employers  of  labor  who  appeared  before  the  Commission  opposed 
the  plan  for  compulsory  health  insurance  incorporated  in  Senate  bill  508  and 
with  one  exception  strongly  opposed  compulsory  insurance  in  any  form. 
They  were  unanimous  in  the  opinion  that  it  would  be  unwise  for  the  General 
Assembly  at  this  time  to  consider  legislation  relating  to  compulsory  health 
insurance,  old  age  pensions  or  the  minimum  wage. 

As  regards  the  viewpoint  of  the  medical  profession,  it  is  said  that 
the  members  thereof  deprecated  "any  action  on  health  insurance  at 
the  present  time ;  declaring  that  it  was  a  matter  to  which  a  great  deal 
more  thought  and  study  should  be  given;  and  that  those  of  their 
number  who  were  best  informed  were  either  in  the  military  service 
or  so  much  absorbed  in  additional  duties  incident  to  the  war  that  they 
could  not  give  us  the  benefit  of  their  knowledge." 

In  continuation,  the  commission  draws  attention  to  the  fact  that 
efforts  are   being  made   to  develop  a  state  policy  with   reference  to 

89 


health  atid  sanitation  which  would  preclude  the  necessity  of  establish- 
ing' any  form  of  compulsory  health  insurance  at  the  present  time. 
vSuch  a  measure,  the  commission  says: 

OlTcrs  a  very  clahorale  plan  for  the  organization  and  administration  of  a 
dcpartnunt  of  health,  with  the  establishment  of  divisions  of  administration 
and  finance,  sanitary  engineering,  laboratories  and  research,  statistics,  com- 
municable diseases,  publicity  and  education,  child  hygiene,  public  health 
nursing,  tuberculosis,  and  hospitals.  It  may  be  urged  that  such  a  plan 
might  be  less  socialistic  than  the  measures  proposed  for  compulsory  health 
insurance,  which  includes  many  of  the  alleviatory  features  included  in  this 
latest  scheme,  but  it  certainly  is  not  less  paternalistic.  It  may  also  be  that 
the  operation  of  such  a  plan  would  prove  less  expensive  to  the  State  than 
a  compulsory  health  insurance  law;  but,  in  our  opinion,  either  would  prove 
more  of  a  burden  than  the  State  of  Connecticut  would  care  to  assume  at 
this  time. 

Concerning  the  cost  of  health  insurance,  the  commission  points 
out  that  the  proponents  "have  not  presented  to  us  anything  beyond 
the  statement  that  the  expense  of  the  usual  form  of  compulsory  health 
insurance  would  be  in  the  neighborhood  of  4%  of  the  wage,  based 
upon  Germany's  experience,"  but  it  is  urged  that  "the  benefit  to  the 
State  of  any  such  system  would  be  worth  all  of  the  cost  however  great ; 
and  that  it  would  be  to  some  extent  at  least  merely  a  redistribution 
of  present  cost  disbursed  in  the  form  of  public  and  private  charity, 
poor  relief,  etc."  This  statement  is  mere  conjecture,  for  all  such 
estimates  are  only  guesswork  opinion  and  without  any  substantial 
basis  of  fact  and  experience  deserving  of  professional  actuarial  con- 
sideration. If  the  German  experience  requires  only  4%  of  the  payroll, 
it  is  a  foregone  conclusion  that  the  expense  in  this  country  would  be 
quite  considerably  in  excess  of  the  German  estimate,  more  so  in  view 
of  the  fact  that  every  bill  thus  far  proposed  includes  a  large  amount 
of  additional  services  not  provided  for  under  any  system  of  social 
insurance  in  European  countries.  The  commission,  however,  refers 
to  the  fact  that,  according  to  such  estimates  as  have  been  arrived  at 
on  the  basis  of  the  best  possible  information,  the  cost  of  compulsory 
health  insurance  to  the  State  of  New  York  would  not  be  less  than 
$96,000,000  per  annum;  and  for  the  State  of  Massachusetts,  $40,800,- 
000.  These  estimates  refer  to  1916,  but  for  1918,  when  the  so-called 
Nicoll  Bill  was  under  consideration  in  the  State  of  New  York,  the 
estimated  cost  per  annum  was  raised  to  $136,891,000.  The  commis- 
sion points  out  in  this  connection  that:  "If  these  figures  bear  any 
relation  to  the  fact,  and  so  far  as  we  have  been  able  to  ascertain  their 
substantial  accuracy  has  not  been  publicly  questioned,  the  cost  under 

90 


the  Mills  Bill  to  the  State  of  Connecticut,  with  an  estimated  popula- 
tion of  1,250,000,  would  be  about  $11,424,000,  and  under  the  Nicoll 
Bill  about  $16,290,000." 

Summarizing  all  the  information  presented  to  it  at  hearings  or 
otherwise,  the  commission  concludes  that  "the  time  has  not  arrived, 
and  for  the  reasons  hereinbefore  given,  the  General  Assembly  may, 
with  entire  propriety  postpone  further  legislative  consideration  of 
this  phase  of  social  insurance  until  the  change  in  our  national, 
State  and  personal  relations  resulting  from  the  war  have  been  fully 
readjusted." 

Likewise  with  reference  to  old  age  pensions,  the  conclusion  was 
arrived  at  that: 

We  may  criticise  the  ineffectiveness  and  the  cost  of  existing  forms  of 
voluntary  insurance  against  the  disabilities  of  age,  just  as  we  may  realize 
that  a  considerable  burden  is  imposed  on  the  State  for  the  maintenance  of 
those  who,  for  one  cause  or  another,  are  unable  either  to  work  or  to  find  work 
and  so  become  wholly  dependent  on  the  State  or  on  private  charity.  Not- 
withstanding this,  it  is  doubtful  if  the  situation  in  Connecticut,  with  regard 
to  the  extent  of  the  disabilities  or  the  necessities  of  those  who  become  so 
disabled,  is  so  acute  as  to  call  for  the  initial  experiment  in  this  respect  to  be 
made  by  the  General  Assembly. 

In  contrast  to  the  recommendations  adverse  to  the  adoption  of 
compulsory  health  insurance  and  old  age  pensions,  the  commission 
suggested  favorable  action  regarding  mothers'  pensions,  referring  to 
some  thirty-six  States  in  which  stich  laws  have  been  enacted,  under 
which  dependent  mothers  may  receive  allowances  to  an  amount 
which  would  be  required  to  meet  the  cost  of  care  of  children  in  in- 
stitutional homes.     The  commission  therefore  states  that: 

The  General  Assembly  may  therefore  well  consider  the  propriety  of  follow- 
ing the  example  of  so  many  of  the  States,  and  either  make  provision  directly 
for  allowances  of  this  kind  at  the  cost  of  the  State,  or  confer  upon  the  towns 
the  necessary  power  and  authority  to  make  such  allowances  in  lieu  of  the 
relief  which  may  be  furnished  under  the  general  statutes. 

Appended  to  the  report  are  a  number  of  special  papers  on  draft 
statistics,  sickness  statistics,  mortality  statistics,  disability  data,  and 
information  concerning  dependency;  also  drafts  of  different  compul- 
sory health  insurance  bills,  particularly  those  introduced  in  the  State 
of  New  York.  Attention  may  be  directed  to  the  appendix  of  data 
relating  to  health  conditions  in  Connecticut,  clearly  emphasizing 
that,  in  the  main,  the  mortality  rate  for  a  period  of  years  reflects 
health  conditions  which  bear  favorable  comparison  with  those  of  other 

91 


States.  Of  course,  in  a  State  of  intense  industrial  activity,  it  is  self- 
evident  that  the  mortality  from  tuberculosis  should  be  above  the 
average  for  the  registration  area,  but  it  is  significant  that  while  the 
tuberculosis  death  rate  for  Connecticut  was  143.3  per  100,000  during 
the  two  years  1915-16,  it  was  157.0  for  the  State  of  Rhode  Island. 
The  appendix  on  data  relating  to  health  conditions  includes  the  urgent 
suggestion  to  the  commission  that  it  consider, 

the  question  of  a  strong  recommendation  to  the  Legislature  that  all  State 
boards  having  to  do  with  matters  of  vital  and  immediate  concern  to  the  public 
should  be  required  to  make  annual  reports  instead  of  reporting  biennially  as 
is  at  present  the  case.  Reports  on  charities  and  corrections,  or  health  and 
labor  conditions,  having  reference  to  conditions  two  or  three  years  out  of  date, 
can  not  possibly  prove  effective  in  molding  public  opinion  and  in  bringing 
about  required  changes  and  reforms.  It  is  true  that  some  boards  publish 
monthly  bulletins  which  are  most  valuable,  but  which  can  not  take  the  place 
of  a  well  reasoned  annual  review  of  the  health,  the  relief,  the  labor,  and  the 
related  problems  concerning  the  welfare  of  the  people  of  the  State. 

Of  special  importance  is  the  recommendation  of  the  commission 
with  reference  to  occupational  diseases  that  "any  disease  arising  out 
of  and  in  the  course  of  employment  should  be  within  the  provisions 
of  the  compensation  law,"  and  that  "the  experience  acquired  in  the 
administration  of  the  compensation  law,  supplemented  by  what  has 
been  reported  to  the  Commissioner  of  the  Bureau  of  Labor  Statistics, 
will  justify  this  State  in  following  the  example  of  the  British  Parlia- 
ment and  the  Parliament  of  Ontario  by  extending  the  benefits  under 
the  Workmen's  Compensation  Law  to  disabilities  resulting  from 
occupational  diseases." 

The  report  is  evidence  of  the  entire  fairness  and  impartiality  of  the 
commission.  The  conclusions  adverse  to  the  establishment  of  health 
insurance  are  based  upon  evidence  sufficient  to  prove  that  such  a 
system  was  not  desired  nor  required  by  the  people  of  the  State  of 
Connecticut,  but  that  obviously  the  propaganda  had  been  initiated 
almost  exclusively  by  the  American  Association  for  Labor  Legislation 
in  the  City  of  New  York.  To  enact  legislation  not  called  for  by  every 
consideration  of  public  policy  is  obviously  contrary  to  American  ideas 
of  self-government  and  is  a  peril  to  the  perpetuity  of  democratic  in- 
stitutions. 


92 


The  report  of  the  Welfare  Commission  is  fully  confirmed  by  an 
investigation  made  in  1918  by  the  State  Department  of  Labor  into  the 
whole  subject  of  industrial  conditions,  including  welfare  work,  young 
mothers  in  industry,  the  sanitary  relation  of  employment  to  disease, 
the  high  cost  of  living,  vocational  education,  etc.  The  recommenda- 
tions of  the  department  make  no  reference  whatever  to  social  insur- 
ance as  a  solution,  but  among  other  suggestions  the  following  may  be 
enumerated:  (1)  The  passing  of  a  law  preventing  the  employment  of 
young  mothers  in  both  textile  and  metal  industries;  (2)  Direct  lighting 
instead  of  the  diffused  indirect  should  be  used  in  every  factory  where 
the  work  requires  close  attention  to  the  operation  of  the  machine; 
(3)  Rigid  requirement  should  be  made  for  reporting  of  diseases  caus- 
ing any  form  of  blood  poisoning. 


93 


RKPORT   OF   THE   OHIO   HEALTH  AND  OLD  AGE  INSUR- 
ANCE COMMISSION,  FEBRUARY,  1919 

The  Ohio  Health  and  Old  Age  Insurance  Commission  was  author- 
ized by  the  legislature  in  1917,  and  the  first  report  was  made  under 
date  of  February,  1919.  The  first  meeting  of  the  commission  was  held 
September  5,  1917,  and  from  the  outset  the  commission  carried  on  its 
investigations  in  co-operation  with  the  Ohio  Federation  of  Labor,  the 
Ohio  Manufacturers'  Association,  the  State  Medical  Association  and 
the  Ohio  Conference  of  Charities  and  Corrections.  The  commission 
was  provided  with  sufficient  funds  to  justify  the  employment  of 
professional  investigators  more  or  less  familiar  with  insurance, pensions, 
occupational  disease  hazards  and  general  medical  and  social  problems. 
The  report  covers  practically  the  whole  field  of  social  insurance, 
commencing,  however,  curiously  enough,  with  a  discussion  of  child 
vitality;  followed  by  national  vitality;  sickness,  dependency  and 
economic  distress;  disability  rates  and  distribution;  the  responsibility 
for  sickness;  who  pays  for  sickness;  liability  for  losses  from  sickness, 
and  measures  of  prevention.  The  subject  of  health  insurance,  con- 
sidered by  itself,  includes  such  considerations  as  the  history  of  the 
movement,  maternity  insurance,  and  the  minority  reports  of  members 
of  the  commission.  It  is  rather  contrary  to  the  accepted  methods  to 
include  minority  reports  in  the  text  of  a  majority  report,  on  account  of 
the  inevitable  confusion  of  conclusions.  The  subject  of  old  age  and  old- 
age  pensions  is  discussed  chiefly  by  Dr.  John  O'Grady,  including  such 
questions  as  the  old  man  in  industry,  old  age  in  Hamilton  and  Cin- 
cinnati, care  of  the  aged  and  sick  in  Ohio  infirmaries,  the  aged  in 
private  institutions,  present  status  of  the  aged,  old  age  assurance,  the 
cost  of  old  age  pensions  and,  finally,  a  minority  report  on  old  age 
pensions,  by  Mr.  M.  B.  Hammond.  The  report  concludes  with  a 
number  of  appendices  on  the  health-insurance  movement  in  the  United 
States,  by  Messrs.  John  R.  Commons  and  A.  J.  Altmeyer,  national 
health  insurance  in  Great  Britain,  by  Edith  Abbott,  sickness  insurance 
in  Germany,  by  Henry  J.  Harris,  the  health  of  Ohio  coal-miners,  by 
Emery  R.  Hay  hurst,  M.  D.,  old-age  pensions  in  the  British  Empire,  by 
W.  B.  Weidler,  and,  finally,  a  summary  of  the  health  and  sanitary  laws 
of  Ohio,  by  Esther  Helen  Burns,  and  a  summary  of  the  testimony  given 
before  the  commission  The  appendices,  which  are  almost  entirely 
by  partisans  of  the  health-insurance  propaganda,  take  up  a  little  over 

94 


one  hundred  pages,  whereas  the  evidence  presented  before  the  com- 
mission by  citizens  of  Ohio  and  persons  directly  interested  in  the 
proposed  legislation  is  dismissed  with  fewer  than  fifty  pages.  There 
has  been  entirely  too  much  padding  of  reports  of  this  kind  with  so- 
called  evidence  of  alleged  experts  in  social  insurance,  representing 
only  a  rehash  of  old  ideas  derived  from  official  reports.  It  is  most 
regrettable,  therefore,  that  the  Ohio  commission  should  not  have  given 
publicity  to  the  facts  presented  before  it  at  the  hearings  held  to  ascer- 
tain the  true  state  of  public  opinion  concerning  the  proposed  measure, 
the  want  of  which  is  most  deplorable  in  the  literature  on  the  subject. 

It  is  difficult  to  summarize  so  large  a  report  within  the  required 
limitations  of  space,  but  the  introductory  statement  is  sufl&cient  to 
indicate  a  strong  bias  on  the  part  of  the  director  of  the  investigation 
towards  compulsory  health  insurance  without  any  reference  whatever 
to  the  evidence  on  the  subject.  It  is  said  for  illustration,  that  the 
"Statistics  of  child  vitality  disclose  an  unsatisfactory  condition." 
Whether  or  not  this  be  so  is  quite  immaterial  in  an  impartial  discussion 
of  compulsory  health  insurance,  which  has  for  its  sole  purpose  the 
insurance  of  wage-earners  and  the  betterment  of  health  conditions  of 
men  and  women  employed  in  industry.  It  can  not  be  argued,  how- 
ever, that  child  mortality  in  Ohio  is  distinctly  unsatisfactory,  although, 
of  course,  improvements  are  possible  in  this  as  in  every  other  direction 
in  which  modern  health  activities  are  being  successfully  applied.  Nor 
does  it  bear  upon  the  question  of  health  insurance  to  argue  that  "The 
children  who  do  not  die  appear  to  be  growing  up  with  far  too  many 
defects  which  may  develop  into  the  disabilities  of  later  life."  Granting 
this  to  be  true,  it  has  no  relation  whatever  to  compulsory  health 
insurance,  which  concerns  itself  practically  exclusively  with  the  pay- 
ment of  pecuniary  benefits  in  the  event  of  sickness  and  a  provision  for 
medical  attendance.  No  social  insurance  in  the  world  has  as  yet  even 
commenced  to  deal  with  the  growing  child  and  to  initiate  correctional 
measures  and  means  to  prevent  a  large  amount  of  physical  and  mental 
impairment,  largely  in  consequence  of  a  crude  and  ill-adjusted  system 
of  education.  The  references  in  the  report  to  sickness  and  economic 
distress,  losses  from  sickness  and  factors  causing  sickness  are  not 
sustained  by  the  evidence  collected  by  the  commission.  There  are 
quotations,  it  is  true,  which  seem  to  have  been  derived  from  special 
investigations,  but  the  entire  presentation  of  the  matter  is  crude  in  the 
extreme.  To  quote  the  estimates  of  Fisher  as  to  the  loss  of  working 
capacity  in  the  case  of  tuberculosis  at  50  per  cent,  is  merely  to  give 
wider  currency  to  guesswork  opinion  in  matters  which  require  extreme 
care  in  their  presentation  to  avoid  false  conclusions.     The  report  is 

95 


filled  with  generalities  not  substantiated  by  the  necessary  evidence, 
which  properly  should  be  the  sole  basis  of  a  report  of  this  kind.  Thus 
it  is  said,  for  illustration,  that  "workers  are  often  seriously  handicapped 
temporarily  or  permanently  by  being  crippled  or  otherwise  unable 
to  do  a  full  man's  work."  What  the  real  facts  are,  is  at  the  present 
time  unknown,  and  it  serves  no  purpose  to  reiterate  platitudes  serving 
no  useful  end.  To  say  that  "Tuberculosis  can  be  checked  only  by 
community  action"  is  to  make  a  statement  which  is  not  in  conformity 
to  the  facts.  A  vast  amount  of  tuberculosis  is  brought  under  effective 
control  by  individual  efforts  or  personal  care,  in  conformity  to  modern 
sanitary  requirements,  without  any  reference  to  action  on  the  part  of 
the  community.  It  is  also  extremely  doubtful  whether  the  hypothesis 
can  be  maintained  that  "the  great  bulk  of  diseases  is  due  to  causes 
arising  from  a  combination  of  individual,  community  and  industrial 
causes."  It  is  much  more  likely  that  not  one  of  these  factors  is  chiefly 
responsible  for  the  health  of  the  individual,  and  it  is  certainly  true  in 
the  case  of  the  infectious  and  transmissible  diseases,  in  which  com- 
munity indifference  or  neglect  is  chiefly  at  fault,  or  in  diseases  due  to 
personal  hygiene,  for  which  the  responsibility  falls  chiefly  upon  the 
individual. 

As  to  the  question  "Who  bears  the  burden  of  sickness,"  it  is  said 
that  "The  direct  burdens  of  sickness  are  now  borne  almost  entirely  by 
the  individual  and  the  pubHc."  Obviously,  they  could  not  very  well 
be  borne  by  any  other  persons  or  powers!  It  is  said  that  "Roughly 
speaking  35  per  cent,  of  the  workers  have  sickness  insurance  for  about 
10  per  cent,  to  15  per  cent,  of  their  loss;"  but  no  statistical  evidence  is 
provided  in  the  summary  to  substantiate  the  statement,  w.hich,  if  true, 
is  of  material  importance.  Wrongful  use  is  made  of  the  statistics  of 
industrial  insurance  companies  by  merely  stating  the  amounts  received 
in  premiums  and  the  amounts  paid  for  losses.  The  substantial  sums 
set  aside  as  reserve  to  meet  future  liabilities  are  complacently  ignored. 
This  error  was  clearly  brought  out  in  the  second  Massachusetts  report, 
in  contradiction  of  a  similar  allegation  made  in  the  first  report.  This 
error  is  also  readily  disproved  by  the  facts  obtainable  from  official 
sources.  The  bias  in  favor  of  compulsory  health  insurance  permeates 
the  entire  report.  Practically  every  important  assertion  is  vitiated  by 
the  influence  of  preconceived  ideas,  which  should  have  no  place  in  an 
official  investigation.  To  say,  for  illustration,  that  "The  causes  of 
sickness  are  so  intertwined  among  the  three  factors  as  to  make 
segregation  of  blame  impossible  and,  therefore,  it  is  necessary  to  ap- 
portion the  whole  liability  among  the  three  factors  with  reasonable 
fairness,"  is  merely  to  argue  in  favor  of  compulsory  health  insurance 

96 


without  an  appeal  to  the  evidence,  which  should  be  presented  to 
sustain  a  so  far-reaching  conclusion.  As  a  matter  of  fact,  the  blame 
or  responsibility  for  sickness  is  easily  placed  where  it  belongs.  Cases 
of  typhoid  fever  rarely  involve  individual  responsibility,  but  almost 
invariably  represent  community  apathy,  indifference  and  neglect: 
while  cases  of  alcoholism  and  arteriosclerosis  are  largely  in  conse- 
quence of  erroneous  habits  of  living,  and  for  which  no  one  would 
think  for  a  moment  of  holding  the  community  responsible. 

The  foregoing  illustrations  are  sufficient  to  emphasize  the  unsys- 
tematic and  badly  reasoned  manner  in  which  the  summary  findings  of 
the  commission  are  presented  to  the  public.  There  is  a  constant  con- 
fusion of  what  is  evidence  with  what  is  mere  opinion  and  of  what  is  fact 
with  what  is  merely  theoretical  assumption.  Having  argued  at  the 
outset  that  the  statistics  of  child  vitahty  (which,  by  the  way,  is  a  mis- 
leading term)  disclosed  an  unsatisfactory  condition,  it  is  argued  with 
reference  to  health  administration  and  medical  service  that  "The 
State  Department  of  Health  is  well  organized  and  nothing  fur- 
ther is  needed  except  the  creation  of  new  divisions  and  enlarged 
appropriations,  from  time  to  time,  to  meet  the  enlarging  needs."  In 
fact,  there  is  not  a  State  in  the  United  States  which  today  has  a  "health" 
department  in  the  true  and  modern  sense  of  the  term.  Every  health 
organization  rests  primarily  upon  the  antiquated  conception  of  quar- 
antine regulations  and  their  enforcement  by  the  police  power,  chiefly 
■  with  reference  to  the  control  of  infectious  and  transmissible  diseases. 
The  health  department,  generally  speaking,  rarely  becomes  operative 
until  the  disease  outbreak  has  assumed  alarming  proportions.  It  is  a 
department  to  prevent  further  deaths  and  to  bring  about  a  deliberate 
reduction  in  the  death  rate,  rather  than  a  department  for  the  improve- 
ment a;id  maintenance  of  the  health  and  the  physical  wellbeing  of 
the  people.  Ohio,  in  this  respect,  is  as  urgently  in  need  of  radical 
reforms,  as  is  every  other  State  in  the  United  States,  and  the  Public 
Health  Service  of  the  United  States  itself. 

Practically  all  the  statements  are  vague  and  general  in  their  nature. 
They  do  not  afford  a  means  of  comparison  with  standards  of  health 
and  longevity  acceptable  to  those  thoroughly  familiar  with  the  facts. 
To  state  that  "There  are  150  hospitals  and  sanatoria  with  about 
25,000  beds  for  patients"  is  utterly  meaningless  unless  the  facts  are 
correlated  to  population  and  compared  with  the  normal  proportion 
of  hospital  accommodation  for  the  population  of  a  modern  State. 

In  the  same  manner,  the  statement  that  there  is  on  the  average  one 
physician  to  every  650  people  is  a  meaningless  assertion,  unless  it  is 
pointed  out  what  the  proper  standard  or  measure  of  representation 

97 


would  be.  To  refer  slightingly  to  the  practice  of  medicine  on  an  indi- 
vidualistic basis,  without  any  evidence  of  gross  defects  and  deficiencies, 
under  existing  conditions  and  methods,  is  to  misuse  the  power  of 
argument  in  a  final  report,  where  there  is  no  opportunity  to  make  a 
reply.  What  the  report  has  to  say  regarding  tuberculosis,  feeble- 
mindedness and  venereal  diseases  is  all,  for  the  same  reason,  to  no 
practical  purpose.  It  is  a  wrongful  assertion  to  maintain  that  "The 
situation  growing  out  of  the  spread  of  venereal  diseases  is  nothing  less 
than  a  national  peril,"  while,  as  a  matter  of  fact,  probably  never  in  the 
history  of  this  nation  has  the  ratio  of  infected  population  been  as  low 
as  at  the  present  time,  while,  conversely,  the  methods  of  prevention, 
treatment  and  control  have  never  been  as  thorough  and  efficient 
as  they  are  today. 

Following  the  preceding  introduction,  the  report  presents  an  out- 
line of  a  plan  for  health  insurance,  marred  by  a  mass  of  platitudes 
and  generalities  which  are  a  hindrance  rather  than  a  help  to  the  ear- 
nest student  of  the  subject  desiring  to  know  the  truth  and  nothing  but 
the  truth.  It  is  said  that  such  insurance  "should  be  carried  by  local 
carriers  democratically  administered."  As  a  matter  of  fact,  no  health 
insurance  fund  anywhere  is  administered  in  a  thoroughly  democratic 
manner  jointly  and  in  all  fairness  by  representatives  of  labor,  industry 
and  the  State.  It  has  been  said  in  this  connection  in  the  report  of  the 
Fabian  committee  of  inquiry  regarding  the  British  national  health 
insurance  that  "We  regret  to  report  that  any  such  reliance  on  demo-- 
cratic  self-government  is  in  so  far  as  the  great  majority  of  insured 
persons  is  concerned,  a  delusion  and  a  snare."  There  is  a  brief 
reference  to  European  experience  with  health  insurance,  but  no  indica- 
tion of  a  thorough  study  of  European  methods,  and,  least  of  all,  the 
experience  of  the  last  few  years  in  Great  Britian.  It  is  wrong  to 
assert  that  the  leading  industrial  nations  of  Europe  have  passed  be 
yond  the  stage  of  voluntary  health  insurance  for  wage-earners,  when 
France  appHes  the  compulsory  system  only  to  miners  and  Belgium 
has  not  found  it  necessary  to  establish  compulsory  insurance  at  all. 

It  is  further  misleading  to  refer  to  our  American  experience  with 
workmen's  compensation  as  experience  with  social  insurance.  Com- 
pensation for  the  results  of  industrial  accidents  is  a  totally  different 
matter  from  a  system  of  providing  pecuniary  benefits  in  the  event  of 
sickness,  largely  at  the  cost  of  the  employer  and  the  State.  In  the 
former  the  responsibility  for  such  accidents  is  easily  placed  and  directly 
traceable,  while  in  the  latter  it  is  extremely  difficult,  if  possible  at  all, 
to  place  the  burden  for  sickness  prevalence  upon  any  one  but  the 
employer,  who  is  expected  to  pay  two-fifths  of  the  expense. 

98 


The  discussion  of  maternity  insurance  fails  to  take  into  account  the 
far  reaching  changes  proposed  in  Great  Britain  and  the  controversial 
aspects  of  maternity  benefits,  as  well  as  the  recently  adopted  reform 
measures  providing  for  state  maternity  and  infant  care  without  any 
insurance  whatever.  To  establish  a  burdensome,  costly,  bureaucratic 
system  of  insurance  to  secure  to  mothers  and  their  children  proper 
care  is  a  grotesque  perversion  of  the  fundamental  theory  of  govern- 
ment, that  the  end  sought  should  be  secured  at  the  least  possible  fric- 
tion and  expense. 

As  to  the  cost  of  health  insurance,  the  report  contains  no  careful 
estimates,  actuarial  or  otherwise,  which  would  be  acceptable  to  any  one 
familiar  with  elementary  business  considerations.  What  the  cost 
of  any  system  of  health  insurance  is  likely  to  be  depends  entirely  upon 
the  benefits  granted,  and  every  health  insurance  bill  thus  far  proposed 
in  the  United  States  goes  much  further  than  any  corresponding  effort 
in  foreign  countries.  In  England  serious  cases  of  illness  are  either  not 
provided  for  at  all  or  not  adequately  so,  and  no  provision  is  made  for 
appliances,  frequently  costly  if  not  reaching  the  proportions  of  pro- 
hibitive expense.  In  England  health  insurance  does  not  include  a 
death  benefit,  w^hereas  most  of  the  bills  in  this  country  have  provided 
such  a  benefit  of  from  $50  to  $100.  It  also  is  a  most  important  ques- 
tion as  to  whether  the  benefits  are  extended  to  members  of  the  family, 
as  is  frequently  the  case  under  the  voluntary  plan  of  health  insurance. 
Upon  such  a  fragmentary  and  not  clearly  defined  basis,  however,  the 
commission  estimates  the  total  cost  of  a  weekly  cash  benefit  at$12, 600,- 
000  per  1,000,000  of  workmen.  An  equal  sum  is  estimated  as  the  ad- 
ditional cost  if  medical  care  is  given  to  the  worker  and  his  dependents. 
The  estimated  additional  cost  of  a  death  benefit  of  $100  would  be 
about  $1,000,000  per  1,000,000  workmen.  Exclusive  of  expenses  of 
administration  the  commission  therefore  estimates  the  total  cost  of  a 
health  insurance  system  for  Ohio  at  $26,200,000  per  1,000,000  work- 
men. As  the  commission  estimates  2,100,000  persons  gainfully  em- 
ployed in  Ohio  in  1918,  the  aggregate  cost  of  a  health  insurance  sys- 
tem, including  weekly  cash  benefit,  medical  care  and  a  death  benefit 
of  $100,  would  have  been  not, less  than  $55,000,000  for  the  year  1918. 
In  addition  to  this  huge  total,  a  simple  guess  is  made  of  the  probable 
expense  of  administration,  which  is  placed  at  $500,000.  The  report 
stands  unequivocally  condemned  as  a  worthless  contribution  to  the 
subject  of  compulsory  health  insurance  by  this  crude  and  reckless 
estimate  of  cost,  than  which  no  question  could  be  more  vital  to  the 
people  of  the  State  of  Ohio  at  the  present  time. 


99 


The  illustrations  given  must  be  sufficient  for  the  present  purpose  to 
emphasize  the  superficial  character  of  an  investigation  amply  provided 
with  funds  and  fully  in  a  position  to  employ  expert  ability  of  a  high 
order  to  produce  more  conclusive  results.  The  bias  throughout 
is  so  self-evident  that  the  final  conclusions  in  favor  of  the  adoption  of 
compulsory  health  insurance  are  materially  impaired  in  value  as  not 
being  an  unbiased  expression  of  qualified  opinion  governed  exclusively 
by  the  evidence  in  the  case.  Of  the  conclusions  with  reference  to 
health  insurance,  space  can  be  given  only  to  the  following: 

II.  Health  insurance  should  be  required  foi^all  employees  to  be  paid  for  by 
employers  and  employees  in  equal  proportion.  The  State  should  pay  all  costs 
of  state  administration  as  in  the  case  of  the  workmen's  compensation  act  and 
all  costs  of  supervision  of  insurance  carriers. 

III.  The  benefit  to  workers  under  health  insurance  should  consist  of :  (a)  cash 
payment  of  a  part  of  the  wages  of  workers  disabled  by  sickness;  (b)  complete 
medical  care  for  the  worker  including  hospital  and  home  care  and  all  surgical 
attendance  and  the  cost  of  all  medicines  and  appliances;  (c)  adequate  pro- 
vision for  rehabilitation  both  physical  and  vocational  in  co-operation  with 
existing  public  departments  and  institutions;  (d)  dental  care;  (e)  medical 
care  for  the  wives  and  dependents  of  the  workers  if  the  same  can  be  done 
constitutionally  and  a  burial  benefit  for  the  worker. 

With  reference  to  the  preceding  recommendation  it  may  be  said 
that  very  much  more  is  provided  than  is  now  obtainable  under  the 
health  insurance  system  of  Great  Britain.  The  medical  care  of  British 
workmen  is  far  from  adequate  in  all  cases,  and  decidedly  inadequate 
in  serious  cases  and  in  cases  of  prolonged  illness.  There  is  insufficient 
provision  for  institutional  treatment,  no  provision  for  dental  care,  and 
wives  and  other  dependents  of  wage-earners  are  not  included  under 
the  British  plan.  The  plan  suggested  by  the  Ohio  commission,  there- 
fore, would  be  very  much  more  expensive  than  the  English  plan,  as  to 
which  it  may  be  said  that  there  is  a  constant  demand  for  an  increase  in 
the  cash  benefit  and  an  insistent  request  for  better  medical  attendance, 
and  most  of  all  for  specialized  services  of  a  really  qualified  character. 

VII.  There  should  be  a  reasonable  waiting  period  not  less  than  six  days 
before  cash  benefits  are  paid.  Medical  benefits  should  be  given  during  the 
entire  time  of  disability.  Benefit  payments  should  be  continued  as  long  as 
disability  lasts  but  not  exceeding  three  years. 

This  benefit  is  also  extremely  liberal,  involving  absolutely  unknown 
items  of  expense.  The  fact  is  generally  overlooked  that  under  the 
British  and  German  systems  most  of  the  benefits  paid  are  with 
reference  to  illness  of  comparatively  short  duration ;  but  the  German 
system  is  far  superior  to  the  British  as  regards  the  care  of  sick  work- 
men in  cases  of  illness  of  prolonged  duration.     Not  to  pay  cash  benefits 

100 


at  the  commencement  of  sickness  generally  leads  to  absence  from  work 
until  the  benefit  period  has  been  reached.  In  other  words,  a  workman 
slightly  indisposed  who  would  have  remained  away  for  perhaps  a  day 
or  two  discontinues  work  for  a  whole  week  to  make  sure  that  he  will 
be  entitled  to  his  cash  benefit. 

Of  the  appendices  to  the  report,  perhaps  the  survey  of  the  health 
insurance  movement  in  the  United  States,  by  John  R.  Commons  and 
A.  J.  Altmeyer,  is  deserving  of  special  consideration.  It  is  rather 
curious  to  find  a  final  report  enlarged  by  contributions  from  a  member 
of  the  American  Association  for  Labor  Legislation,  which  is  chiefly 
responsible  for  the  propaganda  in  favor  of  compulsory  health  insurance. 
There  is  a  careful  avoidance  of  extended  references  to  arguments 
opposed  to  compulsory  health  insurance,  and  only  the  evidence  in  its 
favor  is  extensively  referred  to.  It  is  regrettable  that  the  authors  of 
the  appendix  should  make  light  of  the  insistent  and  just  demand  for 
compensation  on  account  of  occupational  diseases.  While  in  years 
past  the  American  Association  for  Labor  Legislation  concerned  itself 
frequently  with  arguments  in  favor  of  the  prompt  reporting  of  and 
adequate  compensation  for  occupational  diseases,  realizing  that  such 
compensation  would  make  compulsory  health  insurance  practically 
unnecessary  in  all  cases  where  there  would  be  a  semblance  of  re- 
sponsibility on  the  part  of  the  industry  concerned,  it  now  holds  that 
"the  number  of  cases  for  which  compensation  is  allowed  is  negligible." 
This,  of  course,  is  entirely  due  to  the  fact  that  modern  sanitary  pro- 
gress in  industry  has  largely  eliminated  lead-poisoning,,  mercurial 
poisoning,  anthrax,  etc.  In  England  an  act  has  recently  been  passed 
providing  compensation  for  silicosis,  or  practically  dust  phthisis, 
which  may  be  assumed  to  mark  the  beginning  of  ultimate  compensation 
for  all  industrial  lung  diseases  directly  traceable  to  certain  industries. 
Such  compensation  is  just  and  fair  both  to  the  workmen  and  the 
industries  concerned.  The  arguments  against  compulsory  health 
insurance  are  summarized  in  less  than  one  page  in  a  report  of  over 
400  pages.  The  most  conclusive  argument  against  compulsory  health 
insurance  is  not  properly  mentioned,  although  the  facts  were  available 
to  the  commission  at  the  time,  namely,  that  in  California  the  people 
voted  upon  a  constitutional  amendment  giving  power  to  the  State  to 
undertake  compulsory  health  insurance,  and  decidedly  defeated  the 
measure  by  a  vote  of  133,858  for  to  358,324  against  the  proposition. 

In  the  argument  by  Messrs.  Commons  and  Altmeyer  only  what 
suits  the  purpose  of  the  propagandists  of  compulsory  health  insurance 
is  given  adequate  consideration.  There  is  a  totally  inadequate  pre- 
sentation of  the  viewpoints  of  labor,  industry,  the  medical  profession, 

101 


pharmaceutical  profession,  and  the  general  public  opposed  to  com- 
pulsory health  insurance.  They,  however,  go  far  out  of  their  way  in 
attacking  industrial  life  insurance  companies,  as  being  merely  engaged 
in  a  business  which  provides  for  the  payment  of  a  sum  certain  in  the 
event  of  death.  They  grossly  mislead  the  public  when  they  say  that 
"The  industrial  insurance  companies  would  suffer  most  of  all,  since 
they  in  reality  supply  what  amounts  to  burial  insurance."  In  no 
country  in  which  industrial  insurance  is  carried  on  has  there  been  a 
diminution  in  business,  but,  quite  to  the  contrary,  rather  an  increase 
in  income  and  insurance  in  force,  partly  attributable  to  social  insurance 
because  of  the  large  sums  distributed  as  sick  benefits,  a  portion  of 
which  is  undoubtedly  utilized  to  pay  insurance  premiums.  In  England 
compulsory  health  insurance  has  been  in  force  since  1911.  The  growth 
of  the  British  industrial  insurance  companies  during  the  following  seven 
years  has  been  prodigious,  as  shown  by  the  table  (p.  136),  which  also 
shows  the  growth  of  the  German  Victoria,  established  in  1892,  or 
about  seven  years  subsequently,  to  the  introduction  of  compulsory 
health  insurance  in  that  country.  The  returns  for  the  Victoria,  on 
account  of  the  war,  are  limited  to  the  period  1892-1914.  For  both 
Great  Britain  and  Germany  the  statement  is  restricted  to  the  number 
of  policies  and  the  amount  of  insurance  in  force.  There  is  not  the  slight- 
est reason  for  assuming  that  a  similar  result  would  not  follow  in  this 
country  if  compulsory  health  insurance  should  become  the  law  of  any 
one  State  or  of  the  United  States. 

The  report  of  the  commission  was  not  unanimous.  Mr.  Robert 
E.  Lee  took  exception  to  the  recommendations  concerning  compulsory 
health  insurance,  observing,  in  part: 

I  cannot  subscribe  to  the  declaration  of  principles  made  by  the  majority  on 
this  subject,  feeling  that  the  researches  of  the  Commission  or  the  information 
available  to  its  membership,  did  not  furnish  convincing  data  to  warrant  their 
recommendation  upon  a  subject  which  is  practically  new  in  this  country,  and 
upon  which  there  has  been  no  successful  experience  anywhere  that  proves 
that  compulsory  health  insurance  either  reduces  the  amount  of  sickness  or 
prevents  it. 

As  frequently  said  before,  the  propaganda  for  compulsory  health 
insurance  is  largely  the  work  of  the  American  Association  for  Labor 
Legislation  and  not  properly  the  result  of  social  unrest,  demanding 
changes  of  far  reaching  consequences  to  those  concerned.  Mr.  Lee 
remarks  in  this  connection  that 

There  has  been  no  general  demand  from  the  people  of  Ohio  for  the  enactment 
of  legislation  upon  the  subject,  and  such  demand  as  there  is  in  evidence  comes 
purely  from  the  voluntary  explorers  of  unknown,  uncharted  sociological  ideas. 

102 


Proof  of  this  statement  is  the  small  attendance  and  lack  of  general  interest 
manifested  in  the  public  hearings  held  by  the  Commission.  Disavowing  any 
intention  to  be  discourteous  or  offensive  in  my  criticism,  it  has  seemed  to  me 
that  the  chief  effort  of  the  chief  investigator  of  the  Commission  was  to  gather 
data  to  support  a  preconceived  theory  rather  than  to  show  whether  compulsory 
health  insurance  would  reduce  sickness,  and,  if  so,  suggest  a  practical  method 
of  its  application. 

On  the  subject  of  cost  Mr.  Lee  briefly  argues  that 

Should  the  General  Assembly  enact  legislation  conforming  to  the  recom- 
mendation of  the  majority  report,  it  has  been  estimated  it  would  require  from 
$30,000,000  to  $80,000,000  per  annum.  The  wide  variance  in  these  estimates 
indicates  a  decided  lack  of  knowledge  upon  the  subject.  Furthermore,  who 
will  provide  the  funds  for  the  expansion  of  hospital  facilities,  essential  to  the 
successful  operation  of  the  scheme,  it  being  estimated  that  this  item  would 
require  from  $200,000,000  to  $500,000,000. 

The  arguments  advanced  by  Mr.  Lee  are  sustained  by  extracts 
from  the  work  of  Dr.  Wm.  A.  Brend,  on  the  national  insurance  act  of 
Great  Britain,  and  the  report  of  the  committee  on  foreign  inquiry  of 
the  National  Civic  Federation,  (Mr.  J.  W.  Sullivan,  chairman), 
representing  w^age-earners  generally  and  the  American  Federation  of 
Labor.  The  objections  by  Mr.  Lee  are  summarized  in  the  state- 
ment that 

I.  The  compulsory  feature  is  wrong  in  principle,  for  it  would  mean  the 
sacrifice  of  the  independence  of  a  large  number  of  people. 

II.  The  proposed  distribution  of  costs  does  not  equitably  place  the  burden 
upon  society  as  a  whole. 

III.  Before  adopting  questionable  experiments  all  possible  resources  should 
be  utilized  to  prevent  sickness. 

IV.  To  place  upon  society  as  a  whole  the  responsibility  for  individual 
failure  would  bring  us  dangerously  close  to  policies  which  are  at  present  of  the 
gravest  concern  to  the  entire  civilized  world. 

The  brief  report  by  Mr.  Lee  clearly  presents  the  other  side  of  a 
question,  which  has  heretofore  been  almost  exclusively  argued  from 
the  viewpoint  of  the  social  reformer  unfamiliar  with  the  facts  and 
forces  of  modern  social  and  economic  life.  The  most  deplorable 
aspect  of  the  propaganda  for  compulsory  health  insurance  through 
such  commissions  as  those  of  California  and  Ohio  is  the  complete  con- 
fusion of  statutory  functions  as  to  the  duty  to  investigate  and  the 
misused  privilege  to  make  propaganda  for  a  measure  in  advance  of  the 
findings  and  recommendations  of  a  commission  which  should  solely 
have  concerned  itself  with  the  ascertainment  of  the  truth.    There  can 

103 


be  no  more  regrettable  miscarriage  of  effort  or  a  more  gross  perversion 
of  olTicial  functions  than  the  misuse  of  the  high  privilege  of  a  commis- 
sion of  inquiry  to  give  furtherance  to  the  propaganda  of  a  self- 
appointed  association  of  professional  reformers,  with  its  office  in 
another  State. 


104 


SECOND  REPORT  OF  THE  SOCIAL  INSURANCE  COMMIS- 
SION OF  CALIFORNIA,  MARCH,  1919 

The  Social  Insurance  Commission  having  been  reappointed  by 
Gov.  William  D.  Stephens,  a  report  was  accordingly  made  to  the  mem- 
bers of  the  Senate  and  Assembly  of  the  California  Legislature,  under 
date  of  March  31,  1919.  It  is  said  by  way  of  introduction  that  "In 
compliance  with  the  terms  of  the  creating  act,  the  commission  de- 
termined upon  an  intensive  study  of  the  problems  involved  in  the 
adaptation  of  a  social  health-insurance  system  to  the  economic  and 
political  organization  of  California,  'to  the  end  that  detailed  recom- 
mendations might  be  included  in  its  report  to  the  legislature.'  "  It  is 
said  further  that  the  commission  "carefully  investigated  the  operation 
of  the  industrial  life  insurance  sold  to  persons  of  small  income  in 
California,"  and  that  "It  has  given  much  consideration  to  the  problem 
of  seasonable  labor  in  California  and  the  possibility  of  working  out 
special  devices  for  the  effective  insurance  of  persons  employed  as 
stevedores  and  longshoremen,  and  of  those  in  lumbering  and  similar 
occupations."  There  is  no  evidence  in  the  report,  however,  of  such 
"intensive  study."  The  report  is  a  curious  document,  disclos- 
ing rather  the  absence  of  a  thoroughly  worked-out  plan  of  investiga- 
tion based,  in  part  at  least,  upon  the  experience  gained  by  the  previous 
inquiry,  to  which  practically  no  important  reference  is  made,  nor  is 
practical  use  made  of  the  conclusions  therein  advanced.  There  is  no 
analysis  of  the  hearings  which  are  said  to  have  been  held,  as  to  which 
the  evidence  is  not  printed,  nor  is  there  any  reference  to  the  extensive 
propaganda  carried  on  by  the  commission,  though  not  authorized  by 
the  act,  and,  by  inference,  contrary  to  the  intention  of  the  legislature 
as  a  function  properly  to  be  discharged  by  an  investigating  body.  No 
mention  is  made  in  the  report  of  the  difficulties  experienced  by  the 
commission  near  the  end  of  its  labors,  when  the  State  Board  of  Control 
refused  to  honor  vouchers  for  expenditures,  on  the  ground  that  the 
commission  had  not  undertaken  an  investigation,  but  practically  and, 
in  the  main,  carried  on,  and  almost  exclusively  so,  a  propaganda  for 
the  adoption  of  a  constitutional  amendment  authorizing  the  State  of 
California  to  undertake  compulsory  health  insurance. 

The  commission  agreed  on  and  announced  certain  standards  which 
it  regarded  as  necessary  to  any  bill  adaptable  to  California  conditions. 
These  "standards"  do  not  disclose  that  the  commission  was  influenced 

105 


by  its  investigations,  being,  broadly  speaking,  a  repetition  of  previous 
assertions  or  recommendations  made  by  the  first  social  insurance 
commission.  In  the  "standards"  the  use  of  the  word  "premiums"  is 
continued,  although  every  compulsory  health-insurance  system  rests 
upon  contributions  and  not  upon  premiums  in  the  accepted  sense  of 
the  term.  The  extremely  important  matter  of  administration  is 
very  briefly  referred  to,  in  a  reference  to  the  "very  full  digest  of  the 
British  act,"  although  in  the  text  of  the  report  this  "digest"  is 
limited  to  two  and  a  half  pages.  The  digest  in  question  is  rather  a 
reprint  of  the  British  law  and  not  a  critical  analysis  of  the  several 
provisions  and  the  practically  endless  number  of  regulations,  which 
have  the  force  of  law,  issued  or  promulgated  in  connection  therewith. 
It  is  alleged  that  the  digest  "will  show,  as  to  each  detail,  at  least  a 
method  by  which  each  problem  has  been  and  can  be  met."  But,  as  a 
matter  of  fact,  a  series  of  volumes  would  be  required  to  set  forth  the 
administrative  and  other  difficulties  experienced  under  national  health 
insurance,  and  the  very  truth  is  that  thus  far  not  a  single  problem  has 
been  met  to  the  satisfaction  of  those  concerned.  The  act  has 
frequently  been  amended  and  was  in  a  large  measure  recast  in  1918, 
but  no  reference  to  this  important  alteration  is  made  in  the  California 
report,  nor  is  there  any  mention  whatever  of  the  numerous  special  re- 
ports of  departmental  committees,  of  the  utmost  importance  regarding 
matters  of  detail,  without  which  no  digest  or  analysis  of  the  British 
act  can  be  considered  worth  while.  Nor  is  the  argument  justified 
that  "it  is  at  least  made  plain  that  the  questions  of  detail  which 
natur-^lly  arise  in  the  enquirer's  mind  are  not  new  questions,  and  that 
abundant  experience  exists  and  is  available,  in  the  light  of  which  they 
can  be  met."  There  has  been  no  consolidated  account  of  the  British 
experience  really  useful  for  the  purpose  of  establishing  such  a  system 
in  another  country,  and  whatever  experience  is  available  is  certainly 
not  referred  to,  or  in  sufficient  detail  to  be  useful  for  the  purpose  by  the 
California  commission. 

Under  "Reasons  for  Standards"  it  is  said  that  "the  reasons  for 
compulsory  rather  than  purely  voluntary  insurance  are  outlined 
above,"  but  there  is  no  agument  advanced  that  can  really  be  con- 
sidered conclusive  in  favor  of  the  compulsory  plan.  It  is  also  a  serious 
misstatement  to  argue  that  the  voluntary  system  has  failed,  and  that 
the  compulsory  system  would  be  successful  because  of  the  allegation 
that  tlie  voluntary  has  failed  "to  reach  those  who  most  need  it."  As 
a  matter  of  fact,  that  is  precisely  the  truth  about  the  compulsory 
system,  which,  neither  in  England  nor  in  Germany,  has  reached,  or 
possibly  can  reach,  the  poorest  poor,  or  those  most  urgently  in  need  of 

106 


material  assistance  and  qualified  medical  aid  during  sickness  of  more 
or  less  prolonged  duration.  In  its  report  on  the  National  Insurance 
Act,  issued  under  date  of  March  14,  1914,  or  just  previously  to  the  war, 
when  not  far  from  three  years'  experience  had  been  had,  the  Research 
Department  of  the  Fabian  Society  (supplement  to  The  New  Statesman, 
March  14,  1914)  points  out  that  "We  regret  to  report  that  nothing 
has  yet  actually  been  done  to  remedy  the  special  grievances  of  the 
casual  laborers,  the  dock,  wharf,  and  riverside  workers,  the  'glut  man,' 
the  odd-job  men,  or  the  extra  hands  or  'casuals'  in  all  sorts  of  trades,  of 
whom,  it  is  estimated,  there  are  in  England,  even  apart  from  the 
building  trades,  somewhere  between  a  quarter  and  a  half  a  million  of 
men,  representing  a  population  of  something  like  a  million  souls." 
But  elsewhere  in  the  report  it  is  said  that  "Perhaps  the  gravest  of  all 
grave  facts  that  the  working  of  the  Act  has  revealed  [to  which  no 
reference  is  made  in  the  California  report]  is  the  terribly  low-standard 
of  vitality  at  which  millions  of  our  working  people  are  living.  Econ- 
omists and  physiologists  demonstrate  that,  with  prices  and  rents  as 
they  ar.e,  a  family  maintained  on  a  pound  a  week  cannot  possibly  obtain 
enough  of  the  bare  necessaries  of  life.  It  naturally  suffers  from  chronic 
ill-health.  Meanwhile,  by  the  insurance  premium  the  State  is  abstract- 
ing from  each  of  their  bare  cupboards  one  loaf  of  bread  a  week,  thereby 
starving  them  still  further  into  illness,  in  order  to  pay  for  their  doctor- 
ing and  Sickness  Benefit  during  the  illness,  which  the  State  has  thus 
helped  to  create!"  It  is  therefore  absurd  for  the  commission  to  argue 
that  "We  are  sure  that  both  patients  and  physicians  will  be  infinitely 
better  satisfied  with  a  state  system,  in  which  all  physicians  electing  to 
come  under  the  act  practice  on  equal  terms,  and  patients  choose  for 
themselves  among  those  physicians."  By  removing  the  causes  of 
poverty,  on  the  one  hand,  and  of  ill-health,  on  the  other,  the  standard  of 
life  is  raised  sufficiently  to  enable  wage-earners  to  provide  for  their  own 
needs  in  the  event  of  sickness,  in  their  own  way  and  at  their  own  cost, 
far  more  effectively  and  in  a  much  more  satisfactory  manner  than  can 
ever  be  done  by  a  compulsory  health-insurance  system.  The  "Rea- 
sons for  Standards"  conclude  with  the  statement  that  the  method 
of  payment  of  physicians  is  more  fully  discussed  by  Dr.  Woods  Hutch- 
inson. It  would  require  many  volumes  to  present  the  evidence  to 
be  derived  from  British  medical  periodicals  as  to  the  apparently 
hopeless  problem  of  meeting  the  reasonable  requirements  of  doctors 
for  adequate  compensation.  The  paper  by  Dr.  Woods  Hutchinson 
seemingly  based  on  personal  investigation,  is  limited  to  less  than  seven 
pages,  and  presents  a  superficial  view  of  current  problems  rather  than 
a  critical  analysis  of  extremely  important  questions  at  issue  for  years 

107 


past  and  at  the  present  time  between  the  British  medical  profession 
and  the  British  Government. 

Til  the  outhnc  of  the  act  provision  is  made  for  hospital  treatment, 
which  is  not  included  under  the  British  act;  maternity  benefit  which 
is  recommended  should  be  excluded  in  the  report  of  the  Fabian  Re- 
search Department;  dental  clinics  also  are  not  included  under  the 
British  act;  and  special  tuberculosis  treatment,  which  has  thus  far 
in  Great  Britain  been  far  from  satisfactory  and  in  its  operation  rather 
opposed  to  modern  methods  of  effective  institutional  care;  nor 
does  the  British  act  provide  for  funeral  benefits,  which  by  the 
California  commission  are  placed  at  $100.  Benefits  are  therefore 
included  which  must  very  materially  increase  the  cost  to  the  State  of 
California  in  the  event  that  such  a  plan  should  be  adopted,  and  there- 
fore all  estimates  are  purely  a  matter  of  guesswork  opinion.  Among 
the  medical  features,  provision  is  made  in  the  recommendations  of  the 
California  commission  for  a  general  medical  service,  including  the 
establishment  of  "diagnostic  centers,  in  all  the  principal  centers,  with 
laboratories,  and  usually  attached  to  hospitals."  No  experience  has 
yet  been  had  with  diagnostic  centers  in  any  system  of  social  insurance, 
and  the  suggestion  therefore  relates  to  a  matter  entirely  experimental. 
Regardless  of  much  theoretical  advantage,  there  has  thus  far  been  no 
real  progress  in  the  establishment  of  diagnostic  centers  on  a  basis 
satisfactory  to  both  the  physicians  connected  therewith  and  the 
public.  To  say,  therefore,  that  "A  suitable  sum  shall  be  set  aside, 
from  the  medical  premium  funds,  to  provide  for  specialist  salaries 
and  necessary  laboratory  fees"  is  merely  another  evidence  of  the  readi- 
ness to  indulge  in  guesswork  opinion  and  to  disregard  the  facts  of 
actual  experience. 

Much  is  made  in  an  addendum  to  the  general  report  of  the  majority, 
but  to  which  no  signatures  are  appended,  that  the  Insurance  Acts 
Committee  of  the  British  Medical  Association,  in  1917,  reported  "that 
the  general  system  by  which  the  State  provides  medical  advice  and 
treatment  under  the  insurance  scheme  is  in  the  main  approved." 
This  report  is  elsewhere  referred  to  at  some  length,  and  it  must  there- 
fore be  sufficient  for  the  present  purpose  to  point  out  that  the  British 
panel  physicians  are  now  absolutely  helpless.  The  act  will  not  and 
can  not  be  repealed.  It  further  requires  to  be  considered  that  the  act 
has  unquestionably  raised  the  income  of  the  lower  class  of  physicians 
in  general  practice.  If  the  act  is  "in  the  main  approved,"  the  ob- 
jections to  matters  of  detail  are  so  very  serious,  as  emphasized  in  the 
work  by  Dr.  Brend  on  "Health  and  the  State"  (to  which  no  reference 
is  made  in  the  report)  that  only  those  who  have  no  regard  for  evidence 
and  wilfully  ignore  the  available  truth  in  support  of  the  assertion  that 

108 


the  British  system  lamentably  fails  to  meet  the  real  needs  of  wage- 
earners,  particularly  during  serious  illness  of  prolonged  duration. 

Mr.  George  A.  Dunlop,  in  a  minority  report,  takes  exception  to 
some  of  the  conclusions  and  recommendations,  holding,  for  illustra- 
tion, that  all  employees  should  be  insured  regardless  of  the  amount 
of  their  wages  (the  commission  has  fixed  the  wage  limit  or  class  dis- 
tinction at  $1,600  per  annum).  Mr.  Dunlop  also  believes  in  uniform 
medical  benefits  throughout  the  State  in  place  of  variable  medical 
benefits  corresponding  to  various  funds.  In  this  respect  the  experi- 
ence of  the  British  Approved  Societies  is  decidedly  suggestive  of  the 
ill-advised  political  compromise  under  which  the  administration  of 
benefits  was  placed  in  the  hands  of  some  twenty  thousand  and  odd 
societies  of  every  kind  or  degree  of  intrinsic  worth  and  actuarial  sol- 
vency. Mr.  Dunlop  properly  argues  that  "A  state  health-insurance 
system  which  does  not  apply  to  all  citizens  alike  .  .  .  unnecessarily 
violates  the  American  intuition"  (meaning,  probably,  our  American 
institutions,  most  of  all  the  fortunate  absence  of  wrongful  class  dis- 
tinctions). 

Dr.  Woods  Hutchinson,  in  a  supplementary  report,  previously  re- 
ferred to,  on  the  medical  administration  of  health  insurance,  based 
upon  extremely  superficial  investigations  in  Great  Britain,  argues 
the  illogical  proposition  that  "The  present  system  of  fixed  fees  for 
definite  services  is  utterly  irrational  and  antisocial  and  should 
be  abolished  as  promptly  as  possible,  in  the  best  interests  of  the 
patient,  the  doctor,  and  the  community."  When  it  is  considered  that 
the  practice  of  medicine  throughout  the  whole  civilized  world  rests 
upon  the  fee  system  and  that  social  insurance  at  best  and  at  most 
includes  only  the  wage-earning  element,  there  having  as  yet  been  no 
tendency  disclosed  anywhere  towards  the  adoption  of  a  universal 
system  of  state  medicine,  the  argument  needs  only  to  be  stated  to 
emphasize  its  intrinsic  absurdity.  The  capitation  system,  which 
has  the  hearty  approval  of  Dr.  Hutchinson,  has  proven  far  from  satis- 
factory, at  least  in  the  case  of  doctors  of  more  than  average  ability, 
and  the  British  medical  journals  bear  evidence  of  much  discontent, 
particularly  because  of  the  frequently  long  delays  on  the  part  of  the 
State  to  make  payment  for  services  rendered.  Dr.  Hutchinson  also 
does  not  direct  attention  to  the  fact  that,  practically  without  excep- 
tion, panel  physicians  in  England  carry  on  private  practice  for 
fees  in  precisely  the  same  manner  as  this  was  done  previously  to  the 
passing  of  the  insurance  act.  They  see  nothing  irrational  in  accept- 
ing such  fees  from  those  who  are  able  to  pay  and  who  do  not  come 
within  the  group  compulsorily  insured. 

109 


Kc'feroncc  is  made  to  medical  referees,  which  are  of  comparatively 
recent  introduction  and  which  experience  has  shown  to  be  absolutely 
necessary  for  the  adequate  protection  of  the  funds  against  malingering 
and  fraud.  In  the  German  as  well  as  British  experience,  it  has  been 
found  that  upon  careful  reexamination  frequently  50  per  cent,  and 
more  of  the  alleged  patients  claiming  pecuniary  sick-benefits  are  fully 
able  to  work.  No  attention  is  directed  to  the  fact  that  under  such 
conditions  the  sickness  itself  becomes  quite  secondary  to  the  economic 
aspects  of  the  question  as  to  how  voluntary  unemployment  can  be 
unduly  prolonged  and  how  pecuniary  benefits  can  be  wrongfully 
derived  on  the  basis  of  sickness  certificates  obtained  by  a  multitude  of 
deceptive  methods,  none  of  which  reflects  to  the  credit  of  the  attending 
physicians. 

According  to  Dr.  Hutchinson  the  service  is  adequate  and  satis- 
factory. According  to  Dr.  Brend,  speaking  from  years  of  experience 
and  actual  personal  contact,  the  service  is  anything  but  adequate  or 
satisfactory  when  comparison  is  made  with  conditions  under  private 
practice  as  they  prevailed  previously  to  the  passage  of  the  insurance 
act.  The  report  of  the  Fabian  Research  Department  remarks  in  this 
connection  that  "We  consider  that  the  medical  attendance  and  treat- 
ment thus  provided  has  various  defects  and  short-comings  in  small 
matters  and  in  great — not  by  any  means  wholly  or  even  mainly  the 
fault  of  the  doctors  themselves — which  call  for  prompt  amendment; 
that  it  falls  far  short  of  the  'adequate'  medical  service  guaranteed  by 
the  Act."  Serious  illness  is  not  provided  for,  it  being  said  in  the  report 
referred  to  that,  regardless  of  the  vast  sums  expended  for  medical 
benefit,  "it  is,  on  the  whole,  for  only  the  minor  ailments  of  the  insured 
person  that  medical  attendance  is  being  provided  under  the  Act." 
Even  more  serious  is  the  allegation  by  the  Fabian  Society  that  "In- 
deed, nothing  more  forcibly  strikes  the  investigator  who  watches  the 
stream  of  sufferers  pass,  sometimes  at  intervals  of  only  a  few  minutes, 
before  the  busier  panel  doctors  of  our  great  cities — many  of  whom  are 
now  constantly  overworked  by  the  enormous  number  of  patients  with 
which  they  try  to  cope,  and  harassed  by  the  thought  of  the  numerous 
waiting  crowd — than  the  sheer  impossibility  of  their  making  any 
adequate  diagnosis  in  any  but  the  simplest  cases."  Dr.  Brend  has 
drawn  attention  to  the  fact,  sustained  by  others  who  have  reported 
upon  the  same  subject,  that  the  average  duration  of  "treatment"  or 
consideration  given  to  panel  patients  is  from  three  to  five  minutes 
each.  Thus  medicine  has  been  reduced  to  a  purely  economic  question, 
and  adequate  treatment  in  the  strict  sense  of  the  term  is  entirely  out 
of  the  question  in  the  case  of  panel  doctors  who  have  secured  a  large 

110 


practice.  To  none  of  these  facts  does  Dr.  Hutchinson  draw  attention, 
nor,  in  fact,  does  he  disclose  the  sHghtest  knowledge  of  the  truly 
enormous  literature  of  the  subject  available  to  any  one  familiar  with 
British  medical  periodicals  and  Parliamentary  reports. 

Not  satisfied,  Dr.  Hutchinson  goes  far  out  of  his  way  when  he 
remarks,  in  his  report,  contained  in  the  second  report  of  the  Social 
Insurance  Commission  of  California,  tliat  "Health  insurance  wouM 
provide  the  ideal  and  only  means  of  immediately  detecting  and 
promptly  stamping  out  an  epidemic,  such  as  Spanish  influenza,  and 
other  acute  contagious  diseases." 

Influenza  has  not  been  stamped  out  in  any  country  where  social 
insurance  has  been  in  operation  during  the  recent  epidemic,  least  of  all 
in  Kngland,  where,  fortunately,  the  disease  did  not  assume  the  enor- 
mous proportions  common  in  this  country,  South  Africa,  etc.  Dr. 
Woods  Hutchinson  recommends  the  use  of  vaccine  "to  stamp  out  the 
epidemic  before  it  has  time  to  get  a  foothold,"  although  the  foremost 
bacteriologists  of  this  country  and  the  Hygienic  Laboratory  of  the 
United  States  Public  Health  Service  are  unanimous  in  their  conviction 
that  no  vaccine  has  as  yet  been  produced  which  can  be  relied  upon  as  a 
satisfactory  method  either  in  treatment  or  efforts  to  prevent  the 
occurrence  of  the  disease. 

The  foregoing  is  a  brief  analysis  of  the  contents  of  the  second 
California  report.  It  is  a  document  which  reflects  in  every  line  the 
bias  of  its  chairman  and  his  associates.  The  report  does  not  represent 
the  results  of  an  "intensive"  investigation  and  hearings  aiming  at 
securing  a  qualified  expression  of  public  opinion,  but  rather  the 
deliberate  purpose  of  a  small  group  of  men  to  force  their  ideas,  derived 
almost  exclusively  from  European  experience,  upon  an  unwilling 
public.  Fortunately  an  opportunity  was  had  in  California  to  test  the 
foregoing  conclusions  by  an  appeal  to  the  people.  At  the  election  in 
the  fall  of  1918  the  proposition  was  squarely  placed  before  them  as  to 
the  adoption  or  rejection  of  the  constitutional  amendment  giving 
authority  to  the  State  to  enter  the  field  of  compulsory  health  insurance. 
At  the  election  held  on  November  5,  1918,  following  a  strenuous  ap- 
peal to  the  voters  to  endorse  the  principle  of  compulsory  health  insur- 
ance, the  vote  cast  was  133,858  for  the  amendment  and  358,324  against 
it.  Just  previously  to  the  election  The  Suncy,  a  publication  devoted 
to  the  interests  of  social  workers,  published  an  article  by  Mr.  Edward 
T.  Devine,  entitled  "Will  California  Lead?"  (October  26,  1918). 
Referring  to  the  forthcoming  California  election  as  a  deciding  issue, 
Dr.  Devine  takes  occasion  to  say  that  "The  elementary  principle  of 
social  health  insurance  is  very  simple:  it  is  that  of  preventive  medicine 


and  public  hygiene."  As  a  matter  of  fact,  the  fundamental  principle 
of  all  compulsory  health  insurance  is  economic  relief  or  pecuniary 
assistance  during  illness  of  more  or  less  prolonged  duration,  followed 
bv  medical  treatment  of  the  sick,  and  under  no  system  which  has  yet 
been  developed  has  prevention  of  disease  been  given  priority  to  obvi- 
ously more  pressing  considerations.  It  only  serves  to  mislead  the 
public  to  argue  questions  in  a  manner  contrary  to  the  facts.  Inten- 
tionally or  otherwise,  those  making  propaganda  for  compulsory  health 
insurance  are  almost  invariably  misstating  the  truth.  It  is  therefore 
but  natural  that  their  prophesies  should  be  equally  at  variance  with 
experience.  Dr.  Devine  takes  occasion  to  point  out  that  "Social 
health  insurance  is  coming  as  a  permanent  national  poHcy  assuring  the 
conservation  of  national  resources."  He  concludes  that  "It  is  greatly 
to  be  hoped  that  the  voters  of  California  will  overwhelmingly  endorse 
the  constitutional  amendment  submitted  to  them,  not  only  because  it 
will  hasten  social  insurance  in  that  State  but  because  it  will  encourage 
the  movement  for  such  laws  throughout  the  country."  The  voters  of 
California,  with  a  full  understanding  of  all  that  was  involved  in  such 
radical  and  socialistic  legislation,  overwhelmingly  rejected  the  pro- 
posal and  placed  themselves  squarely  on  record  as  opposed  to 
compulsory  health  insurance  by  a  majority  vote  of  224,466.  Thus 
California,  which  has  led  in  so  much  beneficent  legislation,  by  every  test 
which  can  be  applied  to  rational  and  well-considered  legislative  pro- 
posals points  the  way  in  the  opposite  direction  to  the  one  desired  by 
Dr.  Devine  and  his  associates,  steeped  in  the  experience  of  poor-law 
administration,  but,  broadly  speaking,  unfamiliar  with  the  facts  of  the 
life  and  labor  of  American  w^age-earners  and  those  who  are  dependent 
upon  them,  and  who  manage  their  aflfairs,  including  some  provision 
against  sickness,  in  their  own  way  and  at  their  own  cost,  in  strict  con- 
formity to  the  traditions  and  ideals  of  American  democracy. 

It,  however,  was  not  only  the  voters  who  decided  by  an  over- 
whelming majority  against  compulsory  health  insurance,  but  also 
a  deliberate  body  of  the  highest  standing  in  the  State  of  California. 
The  Commonwealth  Club  of  California,  as  the  result  of  several 
years  of  investigation  and  extended  consideration,  voted,  in  October, 
1918,  or  just  before  the  election,  on  the  question  of  the  amendment,  but 
decided,  with  eighty-eight  votes  against  the  amendment  and  only 
twenty-nine  votes  for  it,  that  its  adoption  would  not  be  to  the 
interests  of  the  people  of  the  State.  The  discussion  which  was  had  at 
the  time  makes  an  illumining  contribution  to  the  subject,  but  it  would 
carry  the  present  discussion  too  far  to  go  at  length  into  the  remarks  by 
those  present  the  verdict  being,  as   said  before,  emphatically  and 

112 


unequivocably,  on  the  part  of  the  membership,  opposed  to  the  amend- 
ment. Attention,  however,  may  be  drawn  to  an  important  fact,  and 
that  is  in  a  brief  historical  sketch  the  statement  is  made  that  in  France 
the  compulsory  system  applies  since  1906  only  to  miners  and  that  in 
Belgium  only  a  voluntary  system  prevails.  In  these  two  countries  of 
Europe,  which  since  the  outbreak  of  the  war  have  been  most  conspicu- 
ous in  the  display  of  true  democracy,  only  the  least  possible  applica- 
tion has  been  made  of  the  compulsory  idea,  and  that  in  one  of  the  most 
hazardous  of  industries,  while  thus  far  the  necessity  has  not  arisen  for 
the  adoption  of  the  system  in  Belgium.  It  may  also  be  pointed  out  in 
this  connection  that  none  of  the  great  self-governed  dominions  of  the 
British  Empire  has  followed  the  example  of  the  mother  country,  for, 
thus  far  at  least,  compulsory  health  insurance  has  not  been  estab- 
lished in  Canada,  Australia  or  the  Commonwealth  of  South  Africa. 


113 


PRELIMINARY  REPORT  OF  THE  ILLINOIS  HEALTH  INSUR- 
ANCE COMMISSION,  MAY,  1919 

The  general  assembly  of  the  State  of  Illinois  passed  an  act,  ap- 
proved by  the  governor  on  June  23,  1917,  providing  for  a  commission 
consisting  of  two  representatives  of  labor,  an  employer,  a  physician,  a 
farmer,  a  social  economist,  a  social  worker  and  two  other  persons  to  be 
appointed  by  the  governor  to  "investigate  sickness  and  accident  of 
employees  and  their  families  (not  compensated  by  workmen's  com- 
pensation in  the  State  of  Illinois),  with  reference  to  the  adequacy  of 
the  present  methods  of  preventing  and  meeting  the  losses  caused  by 
such  sickness  or  injury,  either  by  mutual  or  stock  insurance  companies 
or  associations,  by  employers  and  employees  jointly,  by  employers  or 
employees  alone,  or  otherwise;  and  further,  such  definite  proposals  for 
legislative  measures  to  prevent  and  meet  such  losses  as  may  have  been 
proposed  in  this  or  other  states;  all  with  a  view  of  recommending  ways 
and  means  for  the  better  protection  of  employees  from  sickness  and 
accident  and  their  effects  and  the  improvement  of  the  health  of  em- 
ployed persons  and  their  families  in  the  State." 

The  commission  as  appointed  included  Mr.  William  Beye,  a  well 
known  attorney  of  the  city  of  Chicago,  chairman.  Miss  Edna  L.  Foley, 
superintendent  of  the  Visiting  Nurses  Association,  of  Chicago,  and  a 
recognized  authority  on  public-health  nursing,  Mr.  Matthew  Woll,  a 
labor  leader  and  president  of  the  International  Union  of  Photo  En- 
gravers, Dr. Alice  Hamilton,  an  international  authority  on  occupational 
diseases,  and  others  of  like  prominence  and  reputation.  It  may  be 
questioned  whether  any  one  of  the  other  state  commissions  on  social 
insurance  could  be  considered  so  thoroughly  representative  and  in 
every  way  deserving  of  the  utmost  respect  and  good  faith  as  to  the 
methods  of  procedure  followed  and  the  final  conclusions  arrived  at. 
The  report  of  the  commission  is  a  critical  analysis  of  much  useful  infor- 
mation obtained  by  strictly  scientific  methods  of  impartial  research. 
The  field  surveys  made  in  behalf  of  the  commission  were  placed  in 
charge  of  the  executive  secretary.  Dr.  H.  A.  Millis,  of  the  Department 
of  Political  Economy  of  the  University  of  Chicago.  The  investigations 
made  were  carried  on  in  co-operation  with  the  State  Deparment  of 
Public  Health,  State  Department  of  Public  Welfare,  State  Insurance 
Department,  State  Department  of  Mines  and  [Mining,  the  Health 
Department  of  the  city  of  Chicago  and  the  Illinois  Survey  Commission. 

114 


The  commission  realized  the  impossibihty  of  covering  the  entire  field 
but  among  the  more  important  sections  to  which  it  gave  special 
attention  were  the  following: 

The  extent  of  sickness  and  premature  death;  the  more  important  diseases 
and  physical  defects  and  their  prevalence;  the  extent  and  character  of  disease 
by  communities,  urban  and  rural;  the  extent  and  character  of  disease  by  race, 
sex  and  age;  the  duration  of  sickness;  the  extent  and  character  of  sickness 
among  wage-earners;  the  extent  and  character  of  sickness  by  occupation; 
the  economic  loss  due  to  sickness  because  of  unemployment,  decreased 
efficiencj',  cost  of  treatment,  etc.;  the  relation  between  sickness  and  poverty 
and  the  effect  of  sickness  upon  standards  of  living;  the  causes  of  and  responsi- 
bility for  sickness;  methods  of  preventing  disease;  the  existing  agencies  for  the 
care  of  the  sick — hospitals,  dispensaries,  sanatoria,  etc.;  the  adequacy  and 
cost  of  medical  attendance  and  nursing;  provision  made  for  medical  care  and 
financial  benefits  by  employers,  unions,  fraternal  organizations,  foreign  benefit 
societies,  and  industrial  and  other  insurance  companies;  and  suggested  pro- 
grams for  meeting  the  problem  of  sickness  and  premature  death  and  the  adapta- 
bility of  such  suggested  programs  to  American  conditions. 

With  reference  to  occupational  diseases,  attention  is  drawn  to  the 
fact  that  this  subject  had  been  made  a  matter  of  special  inquiry  by  a 
commission  and  reported  on  in  1911,  so  that,  in  view  of  the  great 
expense  involved  in  making  an  exhaustive  investigation,  it  was 
thought  best  not  to  reexamine  into  the  facts,  more  so  in  view  of  the 
attention  given  to  certain  aspects  of  this  question  by  the  Illinois 
Survey  Commission.  The  field  work,  carried  on  under  the  direction 
of  Professor  Millis,  was  of  a  wide  and  intensive  character,  and  for  the 
purpose  of  securing  accurate  information  relating  to  the  extent  and 
cost  of  sickness  and  poverty.  This  investigation  included  3,980 
families,  several  hundred  of  which  were  on  the  list  of  charitable 
institutions,  secured  through  the  Visiting  Nurses  Association,  but 
over  three  thousand  were  normal  wage-earners  residing  in  typical 
city  blocks  occupied  largely  by  the  families  of  workingmen.  The 
larger  aspects  of  the  investigation  are  clearly  indicated  by  the  state- 
ment that 

« 

To  ascertain  the  facilities  for  caring  for  the  sick,  an  intensive  investigation 
has  been  made  of  public  dispensaries,  and  data  have  been  secured  relating  to 
hospital  facilities  and  their  rates,  physicians'  fees,  collections,  etc.,  and  com- 
munity nursing.  Disability  insurance  and  life  insurance  have  been  intensively 
studied  in  investigations  of  casualty  and  assessment  companies,  group  life  and 
disability  insurance,  industrial  life  insurance,  and  foreign  benefit  societies. 
Benefit  associations  maintained  by  employers  and  their  employees  and  the 
provision  made  for  the  sick  by  labor  organizations  have  also  been  investigated 
in  the  same  intensive  way.  An  intensive  study  has  been  made  of  health  con- 
ditions in  coal  mines  and  coal  mining  communities.     Less  intensive  studies 

115 


have  been  made  of  infant  welfare  work,  and  the  medical  examination  and  nurs- 
ing care  of  school  children.  Finally,  concise  reviews  of  compulsory  health 
insurance  in  Germany  and  Great  Britain  and  of  the  health  insurance  move- 
ment in  the  United  Slates  have  been  secured  from  scholars  selected  as  pecu- 
liarly wi'il  fiUfd  to  make  them. 

This  enumeration  of  functions  and  duties  is  clearly  suggestive  of  a 
scientific  purpose  of  a  high  order,  in  gratifying  contrast  to  the  obvious 
bias  and  stipcrlicial  methods  of  state  commissions,  conceiving  it  to 
be  their  duty  to  make  propaganda  for  health  insurance  rather  than  to 
make  investigations  into  the  facts  for  the  benefit  of  those  who  vi^ant  to 
know  the  truth  and  nothing  but  the  truth.  The  commission  has  had 
six  public  hearings  throughout  the  State,  but  unfortunately  some  of 
these  were  materially  interfered  with  by  the  epidemic  of  influenza  and 
the  board-of-health  regulations  prohibiting  the  holding  of  public 
meetings  at  the  time.     It  is  said,  however,  that 

Notice  of  the  hearings  was  sent  to  the  various  groups  interested.  Those 
who  appeared  were  fairly  representative  of  the  several  groups  in  the  popula- 
tion, the  agriculturists  excepted.  In  a  number  of  cases,  the  oral  testimony 
given  at  the  public  hearings  has  been  supplemented  by  written  statements 
and  briefs  subsequently  filed  with  the  Commission.  In  addition  to  the  public 
hearings  indicated,  several  conferences  have  been  held  with  experts — phy- 
sicians, pubhc  health  officers,  insurance  men,  and  others. 

Governed  by  the  evidence  derived  from  all  existing  sources,  the 
commission  nevertheless  did  not  find  it  possible  to  make  a  unanimous 
report.  The  minority  report,  signed  by  Dr.  Alice  Hamilton  and  Mr. 
John  E.  Ransom,  fails,  however,  to  disclose  evidence  tending  to  prove 
that  the  commission  was  governed  in  its  conclusions  otherwise  than 
by  the  facts.  It  is  stated  in  the  majority  report  that  the  commission 
gave  consideration  to  five  main  questions:  "(1)  What  is  the  problem 
presented  by  sickness  and  death?  (2)  What  is  being  done  in  Illinois 
to  control  and  prevent  disease  and  to  conserve  health?  (3)  What  is 
beingdone  to  care  for  the  sick  and  the  physically  disabled?  (4)  What 
is  being  done  to  compensate  for  loss  of  earnings  and  to  meet  the  bills 
caused  by  sickness  and  death?  And  (5)  What  more,  if  anything,  can 
and  should  be  done  to  meet  the  situation  as  found  by  investigation?" 

It  is  fully  explained  that  these  investigations  were  carried  on  in 
strict  adherence  to  the  policy  outlined  at  the  organization  of  the  com- 
mission, namely,  that  the  investigations  should  be  as  thorough  as 
limitations  of  time  and  money  would  permit,  with  the  single  purpose  of 
ascertaining  the  facts,  and  with  a  strict  regard  to  scientific  accuracy 
regardless  of  what  theory  might  be  supported  by  them.  And,  further, 
the  extremely  important  supplementary  principle  was  laid  down  at  the 

116 


outset  "that  not  until  the  investigation  shall  be  completed,  the  facts 
assembled  and  the  completed  data  available,  shall  consideration  be 
given  by  the  Commission  to  the  formulation  of  any  conclusion  or 
recommendation."  This  scientific  and  profoundly  impressive  atti- 
tude of  mind  may  well  serve  as  an  example  to  similar  commissions  in 
other  States,  being  in  marked  contrast  to  the  bias  and  prejudice  truly 
apparent  in  the  reports  of  such  commissions  as  those  of  California  and 
Ohio.  Unless  the  foregoing  principles  are  adopted  and  adhered  to  it  is 
clearly  out  of  the  question  that  the  results  of  an  investigation,  however 
otherwise  ably  arrived  at,  can  carry  weight  with  those  who  are  governed 
only  by  the  facts  and  the  proof,  whatever  conclusions  may  result 
therefrom.  The  Illinois  commission  says  with  reference  to  this  point, 
"Knowing  the  thoroughness,  the  singleness  of  purpose,  and  the  manner 
in  which  the  investigations  were  carried  on,  the  Commission  has  the 
utmost  confidence  in  basing  its  findings,  conclusions  and  recommenda- 
tions upon  the  results  in  so  far  as  they  cover  the  many  phases  of  the 
problems  under  consideration  by  the  Commission." 

It  is  regrettable  at  this  time  that  the  full  report  of  the  commission 
should  not  be  available,  only  a  partial  report  having  thus  far  been 
published.  The  section,  however,  having  reference  to  conclusions  and 
recommendations  of  the  commission  is  given  in  full  and  in  sufficient 
detail  to  set  forth  the  governing  reasons  for  the  conclusions  finally 
arrived  at.  These  conclusions  concern  a  population,  estimated  from 
the  federal  census  to  July  1,  1918,  at  approximately  6,300,000,  and 
wage-earners  and  their  dependents,  estimated  at  4,550,000,  or  about 
seven-tenths  of  the  entire  population. 

The  commission  proceeds  in  its  reasoning  from  the  only  basis  at  all 
applicable  to  the  purpose,  and  that  is  the  existing  amount  of  illness 
among  Illinois  wage-earners,  with  due  regard  to  its  nature  and  dura- 
tion of  severity.  The  conclusions  of  the  commission  regarding  the 
number  of  wage-earners  ill  at  any  given  time  are  set  forth  in  the  follow- 
ing rather  extended  but  extremely  interesting  observations: 

Seven  investigations  made  by  the  Metropolitan  Life  Insurance  Company 
in  as  many  communities  show  that  1.83  per  cent,  of  the  633,856  persons  can- 
vassed were  unable  to  work  because  of  sickness  or  non-industrial  accident  on 
the  days  the  inquiries  were  made.  This  percentage  shows  the  number  who 
may  be  expected  to  be  disabled  at  a  given  time  by  reason  of  sickness  or  acci- 
dent for  following  their  ordinary  pursuits.  This,  however,  does  not  show  the 
number  who  have  disabilities  which  may  impair  efficiency  and  which  may  call 
for  treatment.  Medical  examinations  made  of  4,573  persons  at  Framingham, 
Mass.,  showed  that  25  per  cent,  had  what  were  classed  by  the  examining 
physicians  as  "serious  affections."  Approximately  35  per  cent,  of  the  2,510,- 
706  young  men  examined  in  the  first  draft  were  rejected  as  not  meeting  army 

117 


standards.  Returns  of  the  results  of  the  physical  examinations  of  69,171 
applicants  for  work  in  Illinois  show  that  about  the  same  percentage  (33.1) 
were  found  to  Ijc  disca.sed  or  defective  and  that  19  per  cent,  of  the  69, 17 1  were 
rejected  as  not  physically  suitable  for  the  work  applied  for.  In  all  of  the  above 
cases  it  is  disclosed  that  many  of  the  affections,  diseases  or  defects  had  existed 
since  childhood.  It  therefore  need  occasion  no  surprise  to  find  that  37,356, 
or  47.1  per  cent.,  of  79,383  Chicago  school-children  examined  in  1915  were 
found  to  be  diseased  or  physically  defective  and  that  32,860  of  them  were 
advised  to  secure  treatment.  Investigation  has  shown  that  the  number  of 
diseased  and  defective  children  is  likely  to  be  larger  in  rural  communities  than 
in  such  urban  communities  as  Chicago. 

The  general  observations  concerning  sickness  and  physical  di  - 
abilities  are  amplified  by  the  sickness  experience  of  a  year,  ascertained 
by  a  personal  investigation  of  all  the  families  living  in  forty-one  blocks 
of  the  city  of  Chicago,  chiefly  occupied  by  wage-earning  families,  and 
carefully  selected  so  as  to  be  typical  of  the  much  larger  number  of 
wage-earning  families  in  the  city.     It  is  explained  that 

These  "Block  Studies"  covered  3,048  famiHes  with  12,450  members.  It 
was  found  that  65.8  per  cent,  of  these  families  had  one  or  more  cases  of  serious 
illness  during  the  twelve  months  ending  with  the  date  of  the  visit  made  by  the 
investigators.  "Serious  illness"  was  defined  so  as  to  include  all  cases  of  dis- 
ability for  work  or  school  for  a  week  or  more  caused  by  sickness  or  non-indus- 
trial accident,  all  cases  of  serious  chronic  affections,  such  as  tuberculosis, 
regardless  of  whether  or  not  they  caused  such  disability  at  any  time  for  as 
much  as  a  week,  and  serious  affections,  such  as  of  the  tonsils,  of  shorter  dura- 
tion provided  a  doctor  or  surgeon  was  secured  to  give  needed  treatment.  Of 
the  2,708  wage-earning  families  in  these  blocks,  66.5  per  cent,  had  had  one  or 
more  cases  of  serious  illness  as  thus  defined.  In  57.4  per  cent,  or  more  than 
half  of  the  1,802  wage-earning  families  with  sickness,  one  or  more  wage-earners 
had  been  seriously  ill.  Of  the  entire  number  of  wage-earners  27.3  per  cent, 
had  been  ill  and  (counting  only  losses  of  a  duration  of  a  week  or  more)  20.9 
per  cent,  of  them  had  lost  a  week  or  more  of  work  because  of  their  disabilities. 
The  relative  number  of  non-wage-earners  in  these  families  reported  as  having 
been  seriously  ill  was  somewhat  larger — 28.3  per  cent. 

Any  and  all  such  statements  sufifer  in  scientific  conclusiveness  at 
the  present  time  on  account  of  the  want  of  a  concise  definition  of  sick- 
ness or  a  strict  limitation  of  the  term.  There  is  the  further  serious 
limitation  that  all  so-called  sickness-insurance  data  are  subject  to 
certain  qualifications  regarding  the  exclusion  of  certain  days  for  which 
sickness  benefit  is  not  paid  as  well  as  the  inclusion  or  exclusion  of 
compensation  on  account  of  industrial  accidents.  In  Germany,  for 
illustration,  all  cases  of  industrial  injury  are  provided  for  under  sick- 
ness insurance  for  the  first  thirteen  weeks  of  the  duration  of  the 
incapacity.     Making    every    possible    allowance,    however,    for    the 

118 


present  difficulties  of  an  exact  comparison,  it  is  nevertheless  quite 
reassuring  to  find  that  of  the  entire  number  of  wage-earners  only  27.3 
per  cent,  have  suffered  incapacity  for  work  on  account  of  illness  of  a 
duration  of  one  week  or  more.  In  the  German  sickness-insurance 
experience  the  proportion  of  workmen  cared  for  on  account  of  illness 
in  the  course  of  a  year  is  almost  invariably  over  40  per  cent,  and  some- 
times over  50  per  cent.,  which  may  be  accepted  as  evidence  that  the 
average  sickness  in  this  country  is  considerably  shorter  in  duration 
and  less  in  severity  than  abroad.  English  experience  also  indicates  a 
much  larger  proportion  of  compensated  illness,  but  in  this  respect  the 
unfortunate  factor  of  malingering,  or  feigned  illness,  requires  to  be 
taken  into  account.  Until  there  is  a  money  inducement  to  exaggerate 
every  slight  ailment  or  indisposition  to  real  sickness  entitling  to 
compensation,  as,  for  illustration,  in  England,  the  fourth  day,  the  sick- 
ness rates  are  naturally  like!}-  to  be  lower  than  in  a  country  not  under 
a  system  of  compulsory  health  insurance.  For  these  and  other  reasons 
it  is  very  important  that  no  fallacious  conclusions  should  be  drawn 
from  a  comparison  of  the  statistics  of  sickness-insurance  societies  or 
state  funds  with  the  corresponding  data  for  the  population  at  large. 
As  a  general  rule  it  may  be  said  that  these  two  kinds  of  data  are  not 
comparable,  being  derived  from  fundamentally  unlike  considerations. 

In  amplification,  however,  of  the  preceding  statement  the  Illinois 
commission  had  an  examination  made  of  the  records  of  a  large  number 
of  mutual-benefit  associations  of  different  types.  Nine  of  these, 
representing  over  663,000  wage-earners,  compensated  19.9  per  cent, 
of  the  insured  on  account  of  disability  lasting  for  a  week  or  more,  with 
an  average  period  of  severity  of  27.4  days  a  case. 

Combining  all  the  results  obtained  by  the  commission,  it  is  said 
that  probably  "20  per  cent,  of  all  wage-earners  will  be  disabled  for 
more  than  seven  days  in  the  course  of  a  year  by  a  sickness  or  non- 
industrial  accident,  with  an  average  of  between  twenty-seven  and 
twenty-nine  days  for  each  wage-earner  disabled.  All  disabling  sick- 
ness of  one  day  or  more  spread  over  the  entire  group  would  indicate  an 
average  loss  of  working  time  of  between  eight  and  nine  days  for  each 
wage-earner." 

The  Illinois  commission's  investigation  proved  conclusively  that 
useful  data  of  this  character  can  be  secured  by  means  of  personal 
inquiry,  and  no  information  is  more  urgently  needed  than  data  of  this 
kind,  emphasizing  clearly  the  true  extent  of  sickness,  with  due  regard 
to  its  duration  or  severity,  as  prevalent  among  American  wage- 
earners  at  the  present  time.  The  details  regarding  sickness  are  to  be 
made  public  in  the  final  report  of  the  commission       It  is  properly 


pointed  out,  however,  that  duration  of  disability  varies  widely  from 
one  case  to  another,  and  reference  is  made  to  the  data  collected,  which 
indicate  "that  of  each  100  disabled  for  more  than  a  week,  65  will  be 
disabled  for  less  than  four  weeks,  19  for  from  four  to  eight  weeks,  7  for 
from  eight  to  twelve  weeks,  6  for  from  twelve  to  twenty-seven  weeks, 
3  for  more  than  six  months,  and  1.29  for  more  than  a  year.  Put  in 
terms  of  lost  wages,  the  investigations  made  in  Chicago  show  that  56.1 
per  cent,  of  those  losing  wages  lost  less  than  10  per  cent,  and  76.2  per 
cent,  less  than  20  per  cent,  of  what  their  annual  earnings  would  have 
been  had  they  not  been  reduced  by  disabling  sickness.  Expressed 
in  another  way,  it  was  found  that  of  those  who  lost  wages  (which  con- 
stituted one-fifth  of  the  entire  group),  43.9  per  cent,  lost  10  per  cent,  or 
more  and  23.8  per  cent,  lost  20  per  cent,  or  more  of  what  their  earnings 
would  have  been.  Expressed  in  terms  of  the  wage-earning  group,  it  is 
indicated  that  20  per  cent,  will  be  disabled  for  more  than  one  week,  13 
per  cent,  for  more  than  one  week  and  less  than  four  weeks,  7  per  cent, 
for  four  weeks  or  more,  3.2  per  cent,  for  eight  wrecks  or  more,  1.8  per 
cent,  for  twelve  weeks  or  more,  0.6  per  cent,  for  more  than  six  months 
and  that  of  the  entire  group  of  wage-earners  it  may  be  expected  that 
8.8  per  cent,  will  lose  10  per  cent,  or  more  and  4.8  per  cent,  will  lose  20 
per  cent,  or  more  of  what  their  earnings  would  have  been  but  for  dis 
abling  sickness." 

In  considering  the  preceding  observations  the  fact  must  be  kept  in 
mind  that  on  general  principle  the  commission  assumed  payment  of 
sickness  benefit  from  the  seventh  day  of  illness.  Under  national  health 
insurance  in  Great  Britain  the  payment  commences  from  the  fourth  day 
of  illness,  which,  how^ever,  for  insurance  purposes,  must  at  the  same 
time  represent  incapacity  for  work.  A  person,  of  course,  may  be  sick 
or  indisposed  without  being  incapable  of  performing  some  economic 
service  or  other,  and  this  qualification  in  English  experience  has  led  to 
a  considerable  amount  of  difficulty  in  administration.  Upon  this 
point  it  has  been  obsei^^ed  by  Dr.  Wm.  A.  Brend,  in  his  work  on 
"Health  and  the  State,"  that  "The  root  cause  of  these  difficulties  is 
the  fact  that  the  right  to  sickness  benefit  is  based  upon  an  unsound 
principle.  Benefit  during  sickness  is  only  payable,  according  to  the 
Act,  when  a  person  is  'rendered  incapable  of  work.'  In  practice  it  is 
impossible  in  a  very  large  number  of  cases  to  observe  this  condition. 
A  person  may  still  be  capable  of  work — it  depends  a  good  deal  upon  the 
nature  of  the  work — even  if  suffering  from  relatively  severe  illness. 
He  may  be  able  to  work  during  the  early  stages  of  acute  illnesses,  or 
while  suffering  from  chronic  affections  such  as  tuberculosis,  heart- 
disease,  aneurism,  etc.     Apart  from  severe  affections,  it  is  certain  that 

120 


if  the  Act  were  interpreted  literally,  many  thousands  of  payments  in 
respect  of  anemia,  dyspepsia,  and  other  conditions  could  not  be  justi- 
fied. What  therefore  actually  happens  is  that  unless  the  doctor  is 
dealing  with  a  case  of  obviously  incapacitating  illness,  he  pays  little 
attention  to  the  strict  requirements  of  the  Act." 

Similar  considerations  affect  the  question  of  the  economic  cost  of 
wage-earners'  sickness.  The  Illinois  commission  points  out  in  this 
connection  that 

In  the  investigation  of  wage-earning  families  in  the  residence  blocks  selected 
in  Chicago,  an  effort  was  made  to  ascertain  the  money  cost  of  sickness.  The 
average  wage  loss  of  wage-earners  disabled  for  a  week  or  more  at  a  time  was 
found  to  have  been  $119  and  13.7  per  cent,  of  what  their  earnings  would  have 
been  but  for  the  disability.  Spread  over  the  4,474  wage-earners  in  these 
families  this  represents  an  average  loss  of  $24.95  per  man  and  3.33  per  cent,  of 
his  earnings  for  these  averaged  $750.37  for  the  year.  To  each  dollar  of  lost 
wages  it  was  found  that  appro.\imately  25  cents  must  be  added  for  medical 
bills  paid.  Of  course  the  wage-earners  bear  the  medical  bills  of  their  depend- 
ents also.  This  same  investigation  showed  that  for  each  wage-earning  family 
in  which  there  had  been  illness  of  the  types  recorded,  the  average  cost  for  the 
year  in  wages  lost  at  the  time  of  disabling  sickness  and  in  medical  bills  paid 
was  $97.98.  Taking  these  losses  and  outlays  and  the  medical  bills  paid  where 
there  was  no  serious  illness,  the  cost  in  wages  lost  and  medical  outlays  was 
found  to  approach  $75  per  family  per  year.  This  is  more  than  5.8  per  cent,  of 
their  income  from  all  sources,  for  these  were  found  to  average  $1,298  per 
family.  If  these  figures  can  be  applied  to  the  entire  State,  it  would  mean  that 
the  cost  of  disabling  sickness  of  wage-earners  alone  in  Illinois  would  be  about 
$57,000,000.  If  to  this  is  added  the  medical  bills  paid  for  their  dependents 
the  cost  of  sickness  in  the  wage-earning  families  of  the  State  would  be  between 
$80,000,000  and  $86,000,000  per  year 

The  commission  clearly  realized  that,  in  its  final  analysis,  the  de- 
mand for  compulsory  health  insurance  rests  upon  the  larger  question 
of  an  inadequate  standard  of  living.  This  has  recently  been  em- 
phasized in  a  small  treatise  of  exceptional  value  by  Mr.  B.  Secbohm 
Rowntree,  on  "The  Human  Needs  of  Labour;"  of  value  also  is  an  earlier 
work  on  "Poverty  and  Its  Vicious  Circles,"  by  J.  B.  Hurry,  London, 
1917.  The  difficulty  in  such  investigations  is  to  ascertain  the  condi- 
tions of  the  real  wage-earning  element  rather  than  the  conditions  of 
those  habitually  near  to  the  poverty  line.  The  commission  points  out 
that  in  the  family  investigations  "it  was  found  that  in  14.3  per  cent, 
of  the  families  with  sickness  (or  16  per  cent,  of  those  with  medical 
attendance)  the  physician's  services,  in  7  per  cent,  (or  57  per  cent,  of 
those  with  nursing  care)  the  nurses'  services,  in  10.5  per  cent,  (or  50 
per  cent,  of  those  who  received  hospital  care)  the  hospital  facilities,  in 
19.3  per  cent,  (or  60  per  cent,  of  those  visiting  dispensaries)  the  dis- 

121 


pcnsary  treatment,  in  4  per  cent,  the  medicines  supplied  had  been 
without  charge." 

These  persons,  however,  it  is  pointed  out,  "do  not  include  the  free 
services  of  physicians  at  dispensaries  or  the  nursing  incidental  to  free 
hospital  service,  or  the  medicine  in  some  cases  supplied  by  the  dis- 
pensary or  the  physician  where  no  charge  was  made  for  treatment." 
Inirthcrmore,  it  is  said  that  "where  fees  were  paid  for  dispensary  ser- 
vice these  usually  covered  only  a  fraction  of  the  cost,"  and  that  there- 
fore "It  is  evident  that  no  small  part  of  the  cost  of  sickness  among 
wage-earners  and  their  families  is  borne  not  by  them  but  by  the  doc- 
tors, the  nurses,  the  dispensaries,  or  by  others." 

It  can  easily  be  understood  that  lax  methods  in  this  respect  may 
lead  to  serious  abuses,  and  any  one  familiar  with  medical  charity 
practice  knows  how  frequently  this  is  the  case.  Sickness  is  unques- 
tionably a  serious  economic  burden  in  wage-earners'  families,  most  of 
all  if  the  illness  is  unduly  prolonged  or  where  the  services  required  are 
of  a  specialist  or  surgical  character.  Under  no  system  of  social  insur- 
ance, however,  has  the  problem  thus  far  been  solved  as  to  how^  the 
real  needs  of  the  thoroughly  respectable  wage-ea  ning  element  can  be 
met.  In  England  specialized  care  is  not  provided,  and  the  service,  on 
the  whole,  is  of  a  mediocre  character,  intended  rather  for  cases  of 
short  duration  and  of  relatively  limited  economic  importance.  The 
Illinois  investigation  brought  out  the  fact  that  while  in  many  cases  of 
illness  additional  income  was  forthcoming  through  wage-earning 
efforts  of  wives  and  children,  nevertheless,  in  spite  of  this  and  of  added 
econom}',  in  a  considerable  number  of  cases  the  wife  or  others  who  had 
not  been  gainfully  occupied  sought  employment,  involving  a  change 
in  standards  of  living,  as  16.6  per  cent,  of  the  wage-earning  families 
with  sickness  had  deficits  for  the  year.  That  these  deficits  were 
largely  due  to  sickness  is  indicated  by  the  fact,  that,  m  contrast, 
only  4.7  per  cent,  of  the  families  without  sickness  had  deficits,  or, 
in  other  words,  an  excess  of  outgo  over  income.  Such  a  deficit,  how- 
ever, does  not  necessarily  imply  the  risk  of  pauperism  or  public  de- 
pendence, at  least  not  in  this  country,  where  the  credit  function  is 
much  more  extensively  used  and  to  better  purpose  than  abroad.  To 
meet  the  deficit  sustained,  it  is  said  that  "some  had  used  savings, 
others  had  secured  material  relief  from  charitable  agencies,  had  secured 
loans,  or  had  used  insurance  received,  while  still  others  left  bills  un- 
paid. IMaterial  relief  in  the  form  of  charity  was  received  by  2.4  per 
cent,  of  the  families  in  which  there  had  been  sickness,  or  by  1.8  per 
cent,  of  the  entire  number  of  the  families  investigated."  If  these  re- 
sults are  applicable  to  the  large  mass  of  wage-earners  in  large  repre- 

122 


sentative  cities  like  Chicago,  they  do  not  indicate  an  alarming  state  of 
affairs,  nor  do  they  justify  the  adoption  of  an  extremely  complicated, 
burdensome,  costly  and  more  or  less  bureaucratic  system  of  compulsory 
health  insurance.  The  economic  condition  of  the  country  has  natur- 
ally had  a  strong  bearing  upon  the  problems  under  consideration. 
The  situation  becomes  seriously  accentuated  during  a  period  of  indus- 
trial depression  or  during  an  exceptional  rise  in  the  cost  of  living.  It 
nevertheless  has  been  shown  by  analysis  of  the  household  conditions 
of  2,084  families  in  the  city  of  New  York,  made  in  behalf  of  the  New 
York  City  Health  Department  by  Dr.  Louis  I.  Harris,  that  of  these  there 
were  only  87  American  families  contracting  debts  during  the  year  1918, 
largely  in  consequence  of  the  high  cost  of  living;  only  one  was  in  debt 
to  an  undertaker  and  three  to  a  doctor.  Out  of  139  Jewish  families,  only 
four  were  in  debt  to  the  doctor,  and  one  to  the  druggist  on  account  of 
medicine.  Out  of  97  Italian  families,  two  were  in  debt  to  the  doctor, 
and  none  owed  money  to  the  druggist  or  otherwise  as  the  result  of  ill- 
ness. Finally,  out  of  43  Irish  families,  only  one  was  in  debt  to  the 
doctor.  There  is,  therefore,  no  evidence  that,  under  fairly  normal  or 
at  least  relatively  prosperous  conditions,  the  family  budget  is  unduly 
depressed  by  the  burden  of  debts  to  doctors,  druggists  and  undertakers, 
on  account  of  sickness  of  more  or  less  prolonged  duration  or  death.  It 
is  evidence  of  this  character  which  is  most  urgently  required  to  answer 
the  question  as  to  the  real  necessity  for  any  form  of  social  insurance. 
It  is  precisely  the  neglect  to  ascertain  such  facts  that  places  the  reports 
of  the  California  and  Ohio  commissions  in  such  a  glaring  contrast  to 
the  report  of  the  commission  for  the  State  of  Illinois. 

Summarizing  the  observations  with  particular  reference  to  poverty 
and  dependency  resulting  from  sickness,  the  commission  concludes 

that 

The  above  is  presented  as  a  summary  of  the  more  important  facts  bearing 
upon  the  problem  of  sickness  as  disclosed  by  our  investigations.  In  a  sentence 
we  find;  (1)  that  somewhat  less  than  2  per  cent,  are  disabled  by  sickness  or 
accident  at  a  given  time;  (2)  that  the  percentage  not  disabled  but  who  have 
serious  affections  which  may  call  for  medical  care  is  distinctly  larger;  (3)  that 
approximately  two-thirds  of  the  wage-earning  families  will  have  one  or  more 
cases  of  serious  sickness  or  non-industrial  accident  in  the  course  of  the  year; 
(4)  that  in  something  more  than  half  of  these  families  the  illness  will  include 
that  of  a  wage-earner;  (5)  that  something  more  than  a  quarter  of  the  wage- 
earners  will  be  sick  or  sustain  non-industrial  accident  in  the  course  of  the  year 
and  that  about  a  fifth  of  the  entire  number  will  lose  a  week  or  more  of  em- 
ployment because  of  the  disability  caused  thereby;  (6)  that  the  loss  of  time 
by  wage-earners  will  average  between  eight  and  nine  days  per  year  for  each 
wage-earner  in  the  entire  group;  (7)  that  the  losses  due  to  sickness  and  non- 
industrial  accident  are  very  unevenly  distributed  among  wage-earning  fami- 
lies; (8)  that  the  average  loss  in  wages  and  medical  bills  connected  with  sick- 

123 


ncss  and  accickiit  will  approach  $75  per  year  per  family  when  spread  over  the 
entire  groui),  amounting  to  5.5  per  cent,  or  more  of  the  average  family  income; 
(9)  that  the  money  cost  of  sickness  and  non-industrial  accident  borne  by  the 
wage-earners  of  Illinois  is  pro^jably  between  $80,000,000  and  $86,000,000  per 
year;  (10)  that  sickness  and  non-industrial  accident  are  frequently  accom- 
panied by  more  or  less  important  changes  in  the  standard  of  living;  (II)  that 
they  give  rise  to  deficits  in  a  substantial  number  of  cases;  (12)  that  in  Chicago 
sickness  and  non-industrial  accident  would  appear  to  be  responsible  for  25.3 
per  cent,  of  the  cases  of  poverty  found  in  our  investigations;  (13)  that  sickness 
and  non-industrial  accident  are  found  as  a  cause  or  as  an  accompanying  con- 
dition of  dependency  in  from  a  third  to  a  half  of  the  cases  of  dependency  not 
giving  rise  to  institutional  care;  and  (14)  that  tuberculosis  and  other  chronic 
diseases  are  each  found  in  from  20  to  25  per  cent,  of  the  cases  where  sickness  is 
a  cause  or  condition  of  dependency. 

In  considering  these  conclusions  it  must  be  kept  in  mind  that  the 
facts  are  drawn  from  a  very  much  congested  population  living  under 
conditions  far  from  compatible  with  modern  standards  of  labor  and 
life.  At  the  root  of  much  illness  lies  the  chaotic  condition  of  housing 
and  overcrowding,  which  in  a  measure  is  a  community  responsibility 
to  which  heretofore  neither  the  local  authorities,  the  State  or  the  nation 
have  given  a  fraction  of  the  attention  urgently  required  for  far-reaching 
reforms.  A  beginning  in  this  respect  is  at  last  being  made  in  England, 
and  the  time  cannot  be  far  distant  when  deliberate  efforts  will  be  made 
in  this  country  to  go  to  the  root  of  the  problem  of  unnecessary  sickness 
and  needless  poverty.  To  prevent  the  existence  of  conditions  which  give 
rise  to  needless  sickness  and  then  to  offer  material  relief  and  medical 
attendance  to  alleviate  distress  is  not  a  solution  worthy  of  the  twentieth 
century,  which  prides  itself  on  its  intelligence  courageously  applied  to 
the  solution  of  problems  largely  an  inheritance  of  apathy  and  in- 
difference in  the  past.  The  foregoing  conclusions  apply  with  ex- 
ceptional force  to  modern  health  legislation,  much  of  which  has  been 
largely  a  matter  of  pretense  and  arrogant  assumption.  The  major- 
ity of  boards  of  health  concern  themselves  effectively  only  with 
the  control  and  suppression  of  infectious  or  transmissible  diseases. 
The  real  question  of  individual  health,  particularly  the  systematic 
physical  examination  and  medical  supervision  of  children  and  young 
persons,  is  far  from  having  reached  the  status  of  an  applied  science  of 
physical  welfare.     In  this  connection  the  commission  points  out  that 

In  many  parts  of  the  State  the  local  health  work  has  not  been  efficiently 
undertaken.  An  analysis  made  by  the  State  Department  of  Public  Health  of 
reports  from  343  health  districts  show  the  limited  public  health  nursing  ser- 
vice; the  limited  amount  of  public  child  hygiene  work;  a  limited  number  of 
public  child  welfare  stations;  a  large  number  of  places  in  which  no  campaign 
has  been  made  to  secure  a  complete  reporting  of  births  and  deaths;  a  number 

124 


of  cities  without  proper  sewerage  systems;  the  exceptional  cases  in  which 
public  provision  is  made  for  disposal  of  garbage;  the  neglect  of  the  water  supply 
which  frequently  can  not  be  reported  as  safe;  the  infrequent  building  codes; 
the  frequent  absence  of  regulations  relative  to  privies;  the  fairlj-  general  failure 
to  inspect  dairies  with  the  result  that  the  conditions  in  dairies  are  frequently 
unsatisfactory  or  bad;  the  frequent  failure  to  report  communicable  diseases 
fully;  the  general  absence  of  laboratories  for  health  work;  and  the  shortcom- 
ings in  handling  contagious  diseases. 

As  a  partial  solution  it  is  recommended  that  the  powers  of  the 
State  Department  of  Public  Health,  which  ranks  as  one  of  the  best 
administered  among  the  several  vStates,  "should  be  enlarged  so  that  it 
may  have  more  authority  to  direct  and  control  matters  affecting  the 
public  health."  A  more  specific  recommendation  would  have  been 
more  acceptable — such,  for  illustration,  as  the  systematic  and  universal 
physical  examination  and  medical  supervision  of  children  and  young  per- 
sons to  the  age  of  majority  and  the  supplementary  physical  and  medi- 
cal examination  and  reexamination  of  factory  employees,  amplified  by  a 
modern  system  of  sickness  registration,  including  the  entire  medical 
experience  under  private  practice,  and  possibly  the  establishment  of  a 
limited  state  medical  service,  consulting  clinics,  modern  dispensaries, 
and,  last  but  not  least,  adequate  and  universal  hospital  accommoda- 
tion, not  only  in  large  cities  but  also  in  rural  sections. 

Attention  is  drawn  to  the  inadequate  service  rendered  by  the  State 
in  the  case  of  tuberculosis  particularly,  although  Illinois  ranks  first 
among  the  States  as  to  sanatoria  provision  made  for  wage-earners  and 
their  dependents,  as  best  illustrated  by  the  truly  magnificent  municipal 
sanatorium  of  the  city  of  Chicago.  It  might  have  been  pointed  out 
by  the  commission  that  the  average  length  of  treatment  free  of  charge 
to  those  in  need  thereof  is  180  days,  or  twice  the  average  length  of  treat- 
ment provided  by  German  social  insurance  or  tuberculosis  institutions. 
The  new  county  tuberculosis  law,  which  provides  for  the  establish- 
ment of  sanatoria,  will  effect  a  profound  improvement  in  a  direction 
which  it  is  properly  pointed  out,  requires  the  utmost  thought  and  care 
on  the  part  of  those  responsible  for  the  health  and  well-being  of  the 
people  of  the  State.  Whatever  is  needed  can  be  brought  about  much 
more  effectively  without  compulsory  health  insurance,  as  best  illus- 
trated by  the  lamentable  shortcomings  of  the  complicated  English 
system,  under  which,  during  the  last  seven  years,  the  progress  made 
has  been  very  far  from  satisfactory  to  those  concerned. 

The  commission  gives  some  consideration  to  maternity  care  and 
infant  welfare  work.  While  the  report  was  in  preparation  a  new 
maternity  welfare  act  was  adopted  ^y  Great  Britain  and  without 
reference  to  national  health  insurance,  which  may  well  be  made  to 

125 


serve  as  a  model  for  this  country.  Unless  compulsory  health  insur- 
ance is  to  be  converted  into  a  universal  system  of  physical  and  medical 
care,  on  the  one  hand,  and  of  material  assistance,  on  the  other,  it 
would  seem  the  better  part  of  wisdom  not  to  confuse  functions  and 
duties,  but  to  specifically  define  a  particular  purpose  and  see  to  it  that 
what  the  law  requires  is  really  carried  into  effect.  In  any  event,  it  is  a 
grotesque  fallacy  to  include  a  burden  of  responsibility  for  maternity 
and  child  welfare  in  a  system  of  compulsory  health  insurance  concerning 
practically  exclusively  male  wage-earners  and  unmarried  w  men  wage- 
earners  typical  of  the  American  industrial  system.  There  is  nothing 
more  important  than  a  proper  system  of  maternity  care  and  child 
welfare,  but  in  no  country  in  the  world  has  better  progress  been  made 
than  in  the  United  States  in  the  development  of  what  is  properly 
comprehended  under  the  term  "child  hygiene."  Reference  need  only 
be  made  to  the  remarkable  achievements  in  the  city  of  New  York,  to 
illustrate  the  future  possibilities  of  applied  intelligence  to  a  need  which 
is  certain  to  become  more  accentuated  with  further  urbanization  and 
under  a  more  intense  industrial  system  than  prevails  at  the  present 
time.  All  such  efforts  suggest  the  supreme  importance  of  adequate 
hospital  facilities  and  a  thoroughly  efficient  system  of  public-health 
nursing.  To  complicate  these  problems  w4th  insurance  considera- 
tions is  largely  to  defeat  their  early  and  proper  solution. 

Without  enlarging  further  on  the  observations  of  the  commission 
in  important  matters  of  detail,  the  present  discussion  is  concluded 
with  a  restatement  of  the  recommendations  made  by  the  majority 
members  of  the  commission. 

Thus,  after  mature  and  extended  consideration,  the  Illinois  com- 
mission on  health  insurance  decided  to  make  no  recommendations 
favorable  to  the  adoption  of  a  system  or  method  of  compulsory  health 
insurance.  The  preliminary  report  itself  is  sufficient  evidence  of  the 
thoroughness  of  the  investigations  made  and  of  the  impartiality  of  the 
members  thereof  in  arriving  at  their  conclusions  and  recommenda- 
tions. It  is  appropriately  pointed  out  in  amplification  of  the  recom- 
mendations that  "at  the  time  H,  A.  Millis  undertook  the  work  as 
secretary  for  the  Commission,  at  his  request,  it  was  made  a  condition 
of  his  so  doing  that  he  should  not  participate  in  the  determination  or 
formulation  of  the  conclusions  and  recommendations  of  the  Commis- 
sion. This  condition  has  been  complied  with.  JMr.  Millis  has  not  been 
present  at  any  of  the  meetings  of  the  Commission  at  which  its  con- 
clusions and  recommendations  have  been  determined."  This  action  is 
in  marked  contrast  to  the  freedom  allowed  to  the  professional  investi- 
gator of  the  first  California  commission  and  the  executive  director  of 


126 


the  Ohio  commission,  each  of  whom  from  the  very  beginning  of  their 
so-called  investigations  made  propaganda  on  any  and  every  occasion 
for  compulsory  health  insurance,  and  to  this  extent  anticipated  the 
findings  of  State  commissions  appointed  to  investigate  impartially 
and  report  on  the  facts,  and  the  facts  alone. 

The  minority  report  of  the  commission  is  signed  by  Dr.  Alice 
Hamilton  and  Mr.  John  E.  Ransom.  They  concur  in  all  the  recom- 
mendations made  in  the  majority  report,  but  consider  the  same  to  fall 
far  short  of  what  was  called  for  by  the  facts  disclosed  by  the  commis- 
sion's investigation.  They  do  not  agree  with  the  commission's  con- 
clusions relative  to  compulsory  health  insurance,  holding  to  the 
belief  that  "the  results  of  the  investigation  made  for  the  Commission 
are  conclusive  evidence  of  the  need  for  a  system  of  compulsory  health 
insurance  which  would  be  applicable  to  practically  all  members  of  the 
wage-earning  group,  would  more  equitably  distribute  the  burden  of 
the  costs  of  sickness  and  would  make  more  adequate  provision  for  the 
medical  care  of  wage-earners  and  their  dependents  who  become  sick." 
They  therefore  dissent  from  the  conclusions  reached  by  the  majority 
that  "It  is  the  opinion  of  the  Commission  that  its  findings  do  not 
justify  it  in  recommending  compulsory  health  insurance." 

It  would  serve  no  purpose  to  restate  the  reasons  advanced,  which 
are  typical  of  those  given  by  persons  who  have  persistently  been 
making  propaganda  for  compulsory  health  insurance  and  its  favorable 
adoption  by  the  several  States.  They  rest  their  argument  exclusively 
upon  assertions  which  are  plainly  contradicted  by  the  facts  and  a 
rational  interpretation  of  the  aims  and  objects  of  the  intelligent  labor 
element  in  the  United  States  at  the  present  time.  The  minority 
members  advance  such  arguments  as  "sickness  is  a  serious  problem; 
the  problem  is  serious  because  of  the  time  loss  it  entails;  the  cost  of 
sickness  is  another  important  factor  in  determining  its  effect;  sickness 
is  a  serious  problem  in  its  economic  and  social  effects;  sickness  is  a 
problem  calling  for  the  application  of  the  insurance  principle;  that 
sickness  is  an  insurable  risk  is  generally  recognized;  in  spite  of  the  fact 
that  there  is  this  great  variety  of  carriers  in  the  State,  the  great 
majority  of  wage-earners  have  no  health  insurance;  much  of  the  health 
insurance  carried  by  wage-earners  is  inadequate  and  costly;  most  of 
the  health  insurance  carried  by  wage-earners  in  Illinois  provides 
partial  indemnity  for  lost  wages  only;  there  is  a  distinct  need  for  a  bet- 
ter organization  of  medical  service  for  wage-earners;"  and,  "if  the 
application  of  the  insurance  principle  to  the  problem  of  sickness  among 
wage-earners  and  their  dependents  is  to  be  most  effective  it  must  be 
universal." 

127 


All  of  these  are  merely  platitudes  iterated  and  reiterated  on  every 
possible  occasion  by  those  who  are  unwilling  to  concern  themselves 
with  till-  real  facts  of  the  wage-earner's  life.  The  arguments  ad- 
vanced rest  upon  the  fallacious  assumption  that  American  wage- 
earners  represent  the  labor  class  in  the  accepted  sense  common  to 
European  countries — a  stratified  element  of  social  organization 
hopelessly  submerged  by  poverty  and  economic  dependence.  Those 
who  are  making  propaganda  for  compulsory  health  insurance  have  no 
faith  in  the  thrift  element,  in  the  sense  of  self-reliance  and  in  the 
sturdy  independence,  to  which  the  nation  primarily  owes  practically 
the  whole  of  its  social  progress,  at  least  in  so  far  as  the  elements  of 
progress  concern  those  who  are  the  mainspring  of  production  and  of 
our  industries  and  systems  of  transportation  and  who  carry  on  the 
distribution  of  the  necessaries  of  life. 

The  conclusions  of  the  minority  may,  therefore,  be  safely  disregarded 
as  obviously  opposed  to  the  facts  and  to  the  findings  of  the  majority 
of  the  commission,  safeguarded  by  every  possible  means  against  the 
risk  of  partisan  bias,  prejudice  or  unfairness.  The  report  of  the 
Illinois  commission  adverse  to  the  establishment  of  compulsory  health 
insurance  on  the  part  of  the  sovereign  State  of  Illinois  is  in  precise 
conformity  to  the  equally  qualified  investigations  and  impartial 
findings  of  the  commissions  appointed  to  investigate  the  subject  in  the 
States  of  Connecticut  and  Wisconsin.  These  reports,  in  time  to  come, 
will  take  rank  among  the  classics  of  social  insurance  literature  and  re- 
main a  monument  to  the  true  Americanism  of  those  who  had  the 
courage  of  their  convictions  to  give  utterance  to  their  views  opposed 
to  sentimentalism,  socialism  and  fatuous  imitations  of  ideals  foreign 
to  American  wage-earners  and  American  national  life. 


128 


SOCIAL   INSURANCE   IN   THE   UNITED   STATES 

There  is  the  utmost  urgency  for  a  rational  utterance  on  the  subject 
of  compulsory  health  insurance,  if  ill-advised  legislation  is  to  be 
avoided.  As  observed  by  Pearson,  in  his  "Grammar  of  Science," 
"It  is  the  want  of  impersonal  judgment,  of  scientific  method  and 
of  accurate  insight  into  the  facts,  a  want  largely  due  to  the  non- 
scientific  training  which  renders  clear  thinking  so  rare  and  random 
and  irresponsible  judgment  so  common  in  the  mass  of  our  citizens 
today." 

There  could  be  no  better  illustration  of  this  want  of  strictly 
scientific  judgment  and  freedom  from  bias  than  the  fallacious  argu- 
ments advanced  in  the  annual  address  of  the  president  of  the  American 
Association  for  Labor  Legislation  (at  Richmond,  Va.,  December  27, 
1918).  "Social  insurance,"  he  remarked,  "simply  means  the  applica- 
tion of  the  same  principles"  [of  private  insurance]  "to  matters  in  which 
there  is  an  insurable  interest  on  the  part  of  the  community,  or  society, 
or  the  State."  In  plain  truth,  social  insurance  is  not  insurance  at  all 
in  the  strict  sense  of  the  term,  and  its  principles  and  practice  vary 
fundamentally  and  essentially  from  those  which  have  made  private 
insurance  a  highly  honored  and  satisfactory  form  of  business  enterprise 
throughout  the  civilized  world.  A  recent  work  on  "Social  Insurance 
in  the  United  States,"  by  Dr.  Gurdon  Ransom  INIiller,  is  referred  to  as 
"A  very  excellent,  brief,  and  cogent  treatise  on  social  insurance  in  the 
United  States,"  which  "estimates  the  benefits  of  society  from  social 
insurance  largely  in  terms  of  its  incidental  or  inherent  preventive  value, 
such  as  the  reduction  in  the  number  of  industrial  accidents  through 
greater  precautions  for  'safety  first'  being  taken  by  employers  when 
compelled  to  compensate  for  such  accidents  and  to  insure  such  com- 
pensation, or  the  better  use  and  development  of  public-health  agencies 
both  by  employers  and  workers  if  they  should  be  compelled  to  pay  the 
costs  of  insurance  benefits,  which  would  vary  with  the  amount  of  sick- 
ness or  lack  of  attention  to  health  on  the  part  of  individual  workers." 
All  this  is  fallacious  and  mere  assumption,  for  the  benefits  of  insurance 
are  measured  solely  by  the  compensation  for  indemnities  paid  in  the 
event  of  sickness,  disability  or  death.  People  do  not  insure  for  in- 
direct or  general  benefits  but  for  direct  and  specific  advantages. 
Nor  is  the  work  by  Dr.  Miller  an  excellent  treatise  on  the  subject.  I 
have  referred  to  this  work  in  ray  discussion  of  the  failure  of  German 

129 


compulsory  health  insurance  as  "a  grave  imposition  upon  the  credulity 
of  the  American  public  and  a  thoroughly  unworthy  and  grossly  mis- 
leading contribution  to  social  science,  whatever  in  the  broad  or  re- 
stricted sense  of  the  term  that  may  be."  To  a  large  extent  this  work 
consists  merely  of  a  paraphrasing  of  the  statements  issued  by  the 
American  Association  for  Labor  Legislation,  or  the  partisan  writers 
who  contributed  their  vague  and  misleading  theories  on  the  subject. 
To  say,  for  illustration,  that  "The  greatest  authority  on  this  subject 
to-day  is  the  American  Association  for  Labor  Legislation"  is  to  make 
the  whole  discussion  ridiculous.  The  professor  is  a  fatuous  admirer  of 
social  reformers,  and  of  university  experts,  believing  that  "Today  our 
best  thinking  on  social  problems  is  guided,  directly  or  indirectly,  by  uni- 
versity influence."  Referring  to  the  "laboring  classes",  he  argues  that 
"Labor  organizations  need  trained  leadership,  men  versed  in  economic 
and  social  theory  as  well  as  in  daily  operation  of  labor,"  and  that 
"Labor  must  be  represented  on  these  boards"  [industrial  commissions] 
"by  trained  men  who  know  scientifically  modern  social  theory,  legisla- 
tion, and  administrative  methods."  It  would  be  interesting  to  have 
the  views  of  Mr.  Samuel  Gompers  and  Mr.  Warren  S .  Stone  on  this 
suggestion.  Modern  labor  leaders  have  derived  their  convictions, 
which  have  become  operative  on  conduct,  by  living  real  lives  in 
dealing  with  real  problems  instead  of  being  engaged  in  working  out 
visionary  theories  and  attempting  hopeless  social  and  economic 
solutions.  To  quote  Dr.  George  M.  Gould,  an  eye-specialist,  on  the 
"combined  annual  cost  of  illness  and  death  in  the  United  States"  and 
to  refer  to  the  experience  of  Prussia  as  evidence  of  the  relation  of  social 
insurance  to  an  apparent  increase  in  longevity,  merely  proves  that  the 
writer  had  no  real  grasp,  nor  a  real  conception  of  evidence  or  of  author- 
ity, on  the  numerous  questions  with  which  he  attempts  to  deal.  It  is 
not  true  that  Prussia  "shows  the  greatest  increase  in  average  longevity 
during  the  past  century;"  nor  is  it  true  by  implication  that  the  "Ger- 
man social  insurance  system  has  been  the  direct  cause  of  exceptional 
mortality  gains."  Much  more  satisfactory  sanitary  progress  has  been 
made  in  this  country,  but  to  this  no  reference  is  made,  since  the  writer 
relies  exclusively  upon  partisan  propaganda  publications.  To  argue 
that,  "next  to  biologic  and  medical  science,  social  insurance  is  the 
greatest  modern  influence  toward  such  a  result"  (increased  length  of 
life)  is  also  to  make  the  cause  of  public  health  and  sanitary  adminis- 
tration ridiculous. 

Arguments  for  health  insurance  are  summarized  in  the  statement 
that  "Modern  industry-  in  America  must  assume  more  responsibility 
for  the  general  welfare  of  its  workers."     Far-sighted  labor  leaders 

130 


strenuously  object  to  a  policy  in  which  industrial  manhood  assumes 
the  viewpoint  of  the  philanthropist  and  social  worker  in  strict  con- 
formity to  class  distinctions,  which,  unfortunately,  abroad  stratify 
industrial  society  to  the  point  of  hopeless  antagonism.  Industry  is 
not  responsible  for  outbreaks  of  typhoid  fever  or  smallpox,  or  for 
deaths  from  appendicitis,  diabetes,  etc.  To  burden  industry  wrong- 
fully with  a  large  portion  of  the  cost  of  social  insurance  is  merely  to 
increase  the  cost  of  production  and  consequently  needlessly  so  the 
high  cost  of  living.  To  shift  the  responsibility  for  the  highest  attain- 
able condition  of  health  on  the  part  of  wage-earners  and  their  de- 
pendents from  the  health  administration,  where  it  belongs,  to  the 
employer  or  the  employing  corporation  is  certain  to  lead  to  results 
possibly  not  far  from  disastrous.  The  object  should  be  to  strengthen 
the  local  health  administration,  providing  it  with  more  abundant 
resources,  on  the  one  hand,  and  holding  it  strictly  accountable  for 
results,  on  the  other.  It  is  absurd  to  say  that  "Physicians  and  medical 
societies  know  that  the  health  conditions  of  many  American  working 
people  are  on  the  average  not  improving."  Any  one  familiar  with 
even  elementary  vital  statistics  well  knows  that  there  has  been  a  very 
material  and  persistent  lowering  of  the  death  rate,  so  much  so  that  the 
lowest  point  on  record  was  reached  during  the  week  of  July  19,  1919. 
Faultfinders  make  much  of  the  exaggerations  of  minor  imperfections 
in  health  or  physique,  but  they  ignore,  ignorantly  or  wilfully,  the 
gratifying  truth  that  the  American  people  of  today  are  probably  and 
in  every  way  physically  superior  to  their  ancestors  of  two  or  three 
generations  ago.  In  consequence  of  a  tremendous  amount  of  public- 
health  education  reaching  to  the  very  root  of  things,  there  has  been  a 
truly  remarkable  advance  in  physical  well-being,  which  is  reflected 
in  a  low  and  diminishing  death  rate,  which  would  unquestionably  be 
disclosed  by  an  analysis  of  the  rate  of  mortality,  if  comparable  statis- 
tics for  many  years  were  available. 

To  argue  that  "Health  insurance  probably  will  cultivate  the 
practice  of  the  physical  examination  of  prospective  emplovees  in  manv 
industries,  and  may  easily  develop  a  similar  practice  in  all  work  where 
special  physical  fitness  seems  requisite,"  is  mere  conjecture,  plainlv 
contradicted  by  the  facts  of  actual  experience.  There  has  been  no 
such  progress  in  physical  or  medical  examination  in  Germanv  during 
the  thirty  years  of  compulsory  health  insurance,  but  there  has  been 
9,  very  encouraging  progress  in  this  respect  in  the  United  States,  and 
on  a  voluntary  basis,  during  recent  years.  Merely  to  advance 
opinions  without  a  proper  regard  to  the  facts  of  observed  experience 
is  not  to  make  a  contribution  to  scientific  thought.     Of  course,  any 

131 


one  can  argue  that  "Health  insurance,  once  accepted  in  principle 
and  instituted  in  practice,  becomes  a  continuous  social  force  for  the 
general  betterment  of  the  economic  conditions  of  all  working  people," 
but  no  evidence  that  this  is  the  case  has  been  forthcoming,  for  strikes 
and  labor- troubles  otherwise  have  continued  in  Germany  and  Great 
Britain  uninterruptedly  since  the  initiation  of  social  insurance  and 
without  any  reference  to  its  alleged  efficacy  in  raising  the  level  of  social 
and  economic  well-being  of  the  people.  It  is  also  pure  guesswork  to 
argue  with  reference  to  present  objections  to  health  insurance  that 
they  "will  disappear  within  less  than  a  generation  of  time.  Such  has 
been  the  history  of  the  movement  in  all  countries  where  tried." 
There  is  no  evidence  that  such  has  been  the  history  of  the  movement, 
and  certainly  not  in  Great  Britain,  where  the  act  of  1911  was  passed 
as  an  arbitrary  measure,  solely  upon  the  prestige  and  personal 
initiative  of  Mr.  Lloyd  George.  National  health  insurance  in  Great 
Britain  was  not  the  result  of  the  findings  of  a  Royal  Commis- 
sion, or  of  a  Departmental  Committee,  emphasizing  its  needs  or 
suitable  adaptation  to  the  requirements  of  British  wage-earners,  but, 
in  the  words  of  Mr.  Lloyd  George  himself,  "It  was  from  Germany 
that  we  who  were  privileged  to  be  associated  with  the  application  of 
the  principle  to  the  United  Kingdom  found  our  first  inspiration,  and 
it  is  with  her  experience  before  us  that  we  feel  confident  of  the  future." 
What  that  experience  has  been  I  have  tried  to  emphasize  in  my  ad- 
dress on  the  "Failure  of  German  Compulsory  Health  Insurance — A 
War  Revelation." 

We  do  not  need  to  go  to  Germany  for  information  on  insurance. 
No  country  in  the  world  has  made  more  extraordinary  progress  in  the 
development  of  the  theory  and  practice  of  insurance  as  conducted  by 
private  enterprise  than  the  United  States.  So-called  government 
insurance  is  a  deception  in  that  the  term  "insurance"  is  used  as  an 
equivalent  of  the  arbitrary  exercise  of  the  taxing  power.  If  the  in- 
come of  an  insurance  company  is  not  sufficient  to  pay  claims  falling 
due,  there  is  no  alternative  but  a  receivership.  In  so-called  govern- 
ment insurance  deficiencies  are  made  good  either  by  the  im- 
position of  additional  burdens,  whether  specifically  in  the  nature  of 
taxes  or  not  or  by  direct  grants-in-aid  or  subsidies,  such  as  have  been 
the  rule  rather  than  the  exception  in  Great  Britain. 

Nor  do  we  need  to  go  to  superficially  informed  college  professors 
who  pretend  to  authority  on  social  insurance.  Professor  Gurdon 
Ransom  IMiller  is  no  exception  to  the  large  class  of  writers  and  speakers 
thoroughly  unfamiliar  with  both  insurance  and  questions  or  problems 
of  public  health.     In  his  book  on  "Social  Insurance  in  the  United 

132 


States,"  he  remarks,  for  illustration,  that  the  pioneer  health  insurance 
bill  "was  carefully  drawn  by  professional  men  fully  informed  on  all 
phases  of  European  health  legislation  and  administration."  The  writer 
was  a  member  of  the  committee  which  for  some  months  considered 
the  bill  in  question,  and  no  reference  was  ever  made  to  health  legisla- 
tion or  health  administration,  or,  for  that  matter,  to  medical  practice 
at  home  or  abroad.  Not  one  of  the  men  most  prominent  in  the  further- 
ance of  the  propaganda  for  health  insurance  has  ever  in  the  slightest 
degree  rendered  effective  help  or  assistance  to  voluntary  health-promot- 
ing agencies.  Not  one  has  been  instrumental  in  establishing  a  single 
movement  for  the  betterment  of  health  conditions.  Not  one  is  an 
authority  on  the  prevention  or  control  of  tuberculosis,  cancer,  malaria, 
etc.  It  is  a  deliberate  perversion  of  the  facts,  therefore,  to  say  that 
the  first  health-insurance  bill  was  drawn  by  men  familiar  with  these 
aspects  of  compulsory  health  insurance. 

The  writer  relies  upon  a  fugitive  item  in  the  New  York  Press,  of 
January  17,  1916,  to  the  effect  that  "It  is  the  belief  of  the  United 
States  Public  Health  Service  that  35  per  cent,  of  the  workers  of  the 
country  must  ask  for  public  or  private  charity  when  disabled  by 
disease  or  weakness."  The  United  States  Public  Health  Service  has 
never  made  such  an  investigation  to  ascertain  the  relations  of  de- 
pendence or  pauperism  to  illness  or  death.  The  percentage  quoted  is 
pure  conjecture  and  unworthy  of  the  source  to  which  it  is  attributed. 
The  United  States  Public  Health  Service  is  the  highest  authority  on 
health  questions  in  this  country,  and  its  reputation  for  accuracy, 
impartiality  and  fairness  is  placed  in  peril  by  such  guess-work  opinion 
used  for  partisan  and  propaganda  purposes. 

The  only  really  true  and  conclusive  statement  in  the  work  is  a 
quotation  from  the  Insurance  Advocate,  reading  that  "Ultimately  the 
public  pays  the  bill."  The  additional  burdens  resulting  from  com- 
pulsory health  insurance  will  be  enormous.  A  vast  army  of  un- 
necessary officials  will  be  created  to  perform  artificial  functions,  all  of 
which  are  in  the  nature  of  a  curtailment  of  personal  rights  and  privi- 
leges. The  German  experience  in  this  respect  is  absolutely  conclusive. 
The  facts  cannot  be  set  aside  by  the  president  of  the  American  Associa- 
tion for  Labor  Legislation,  who,  in  his  address  as  reprinted  in  the  Month- 
ly Labor  Review,  of  the  United  States  Bureau  of  Labor  Statistics,  for 
February,  1919,  in  the  furtherance  of  its  propaganda  for  compulsory 
health  insurance,  said  that  "Some  recent  silly  twaddle  about  the  failure 
of  social  insurance  in  Germany  on  the  part  of  those  whose  patriotism 
needed  advertising  during  the  war,  and  on  the  part  of  misguided  de- 
fenders and  apologists  for  the  crimes,  errors,  and  mistakes  of  private 

133 


insurance  companies,  has  served  to  confuse  the  public  mind."  Being 
responsible  for  the  statements  made  with  reference  to  the  failure  of  the 
German  system,  I  cannot  but  take  exception  to  this  language,  which  is 
unworthy  of  a  professor  of  Columbia  University.  It  is  not  "silly 
twaddle"  to  present  the  facts  and  figures  as  derived  from  the  official 
reports  of  practically  all  the  German  sickness-insurance  institutions 
during  January,  1917-18,  secured  with  much  difficulty  on  account  of 
the  war.  There  has  been  no  confusion  of  the  public  mind  in  conse- 
quence other  than  such  as  has  been  brought  about  deliberately  by  the 
misstatement  of  facts  in  the  utterance  of  fallacies  by  those  who  have, 
in  season  and  out,  been  making  propaganda  for  compulsory  health 
insurance.  A  man  is  not  less  a  patriot  because  he  is  opposed  to 
German  ideas  of  social  reform.  A  man  may  be  much  less  a  patriot  for 
giving  furtherance  to  German  ideas  which,  in  the  long  run,  must  lead 
to  the  establishment  of  class  distinctions,  a  permanent  stratification 
of  American  industrial  society,  and  the  gradual  destruction  of  all  our 
ideals  of  Anglo-Saxon  freedom  and  of  safeguarded  rights  under  the 
present  order,  against  the  menacing  tendency  towards  the  arrogance  of 
an  arbitrary,  dictatorial  policy  on  the  part  of  the  State. 

The  learned  professor  might  read  to  advantage  an  article  on 
"Social  Insurance  in  Germany  After  the  War,"  published  in  the 
Monthly  Labor  Review  for  April,  1919,  being  a  translation  of  an  article 
by  Professor  P.  Moldenhauer,  one  of  the  foremost  German  authorities 
on  insurance.  This  article  confirms  in  ever}^  respect  my  discussion  of 
"Facts  and  Fallacies  of  Compulsory  Health  Insurance"  and  the 
"Failure  of  German  Compulsory  Health  Insurance — A  War  Revela- 
tion," pointing  out  for  illustration  that  "The  war  has  shifted  the 
actuarial  bases  of  social  insurance  to  the  disadvantage  of  the  insurance 
carriers  .  .  .  the  mortality  rates  have  risen.  The  successful 
combating  of  tuberculosis  has  been  interfered  with  during  the  war, 
and  the  ravages  of  this  disease  have  been  increased  by  undernutrition. 
The  unfavorable  state  of  the  health  of  ex-soldiers,  especially  of  dis- 
abled soldiers,  who  sooner  or  later  will  file  claims  for  pensions,  must 
also  be  taken  into  account.  .  .  The  average  morbidity  rate  in 
fifty-one  sick  funds  distributed  over  the  whole  Empire  rose  from  2.66 
per  cent,  in  1915  to  3.03  per  cent,  in  1917.  .  .  Experience  has, 
moreover,  shown  that  claims  for  sick  benefits  are  always  more  numer- 
ous during  times  of  extensive  unemployment.  .  .  The  number  of 
sick  pensions  has  increased  from  11,806  in  1913  to  79,834  in  1917." 
Invalidity  pensions  are  referred  to  as  "pitifully  small;"  "In  the  work- 
men's accident  insurance  system  the  unsound  method  has  been 
adopted  of  computing  the  premiums  in  such  a  manner  that  they  are 

134 


just  sufficient  to  cover  the  current  annual  expenditures.  .  .  The 
total  expenditures  of  all  trade-accident  associations  have  increased 
from  10,500,000  marks  ($2,499,000)  in  1886  to  218,000,000  ($15,884,- 
000)  in  1916.  .  .  Thus  the  burden  of  the  present  generation  is  being 
lessened  at  the  cost  of  the  coming  generation."  Referring  to  a  re- 
duction in  the  contributions  by  the  Building  Trades  Accident  Asso- 
ciation, it  is  pointed  out  that  the  loss  in  revenue  had  been  made  good 
"by  withdrawals  from  the  reserve  fund."  The  war  loans  by  social 
insurance  institutions  are  said  to  have  reached  the  colossal  total  of 
2,000,000,000  marks  ($476,000,000),  representing  more  than  half  of 
the  assets  invested  in  bonds  of  the  Empire  and  of  the  Federal  States. 
Intimating  the  possibility  of  state  bankruptcy  it  is  said  that  this 
"would  therefore  also  signify  the  bankruptcy  of  social  insurance,  at 
least  of  the  invalidity,  survivors',  and  salaried  employees'  insurance, 
while  sickness  and  accident  insurance  would  also  be  seriously  upset  by 
such  a  calamity."  The  question  may  properly  be  raised  here  whether 
these  utterances  by  one  of  the  foremost  German  authorities  on  social 
insurance,  officially  disseminated  by  the  United  States  Bureau  of 
Labor  Statistics,  are  any  more  entitled  to  be  called  "twaddle"  than 
the  observations  heretofore  referred  to  and  based  upon  the  same 
official  material.  Public  respect  for  educators  and  members  of  the 
teaching  profession  is  not  enhanced  by  such  evidence  of  gross  unfair- 
ness and  incapacity  to  direct  public  opinion  into  channels  which  lead 
with  certainty  to  the  truth.  It  may  not  be  out  of  place  to  quote  in 
conclusion  the  remark  of  Professor  Moldenhauer  that  "it  can  be  said 
that  social  insurance  cannot  be  preserved  in  its  former  extent  if  we 
waste  our  time  with  tiresome  party  squabbles,  if  we  squander  enormous 
sums  on  all  kinds  of  overlapping  administrative  organizations,  and  if 
instead  of  working  and  producing  real  value  we  try  socialistic  ex- 
periments or  chase  after  communistic  Utopias."  The  same  conclusion 
applies  to  the  United  States,  in  which  private  insurance  is  based  upon 
the  highest  development  of  the  altruistic  instinct  of  self-denial  to  an 
extent  not  realized  in  any  other  country  in  the  world.  Where  so  much 
has  been  done  on  a  voluntary  basis  it  would  seem  a  foregone  conclusion 
that  the  field  for  further  development  is  practically  without  limit. 
Labor-unions,  fraternal  organizations  and  the  insurance  companies 
can  all  aid  towards  the  attainment  of  this  ideal,  which  is  strictly 
compatible  with  the  highest  idealism  of  independent  life  and  labor  in  a 
modern  democracy. 


135 


INDUSTRIAL  INSURANCE  IN 
LIFE  OF 


FORCE  WITH  THE  VICTORIA 
BERLIN 


Number  of  Policies 
ia  Force 

Amount  of  Insuranc< 

;  in  Force 

Year 

Marks 

Dollars 

1892 

62,298 

18,290,823 

4,353,216 

1893 

120,428 

35,729,637 

8,503,654 

1894 

182,932 

54,187,482 

12,896,621 

1895 

274,824 

77,659,326 

18,482,920 

1896 

604,802 

133,072,236 

31,671,191 

1897 

1,020,908 

200,236,745 

47,656,344 

1898 

1,277,083 

249,321,110 

59,338,422 

1899 

1,434,669 

283,071,076 

67,379,915 

1900 

1,628,551 

319,562,828 

76,055,954 

1901 

1,811,194 

351,549,466 

83,668,774 

1902 

2,042,373 

391,433,984 

93,161,287 

1903 

2,303,174 

441,490,447 

105,074,725 

1904 

2,548,306 

490,175,802 

116,661,840 

1905 

2,745,166 

529,853,657 

126,105,171 

1906 

2,911,684 

573,309,779 

136,447,728 

1907 

3,027,372 

613,448,456 

146,000,731 

1908 

3,172,947 

654,920,725 

155,871,131 

1909 

3,388,320 

710,306,034 

169,052,835 

1910 

3,524,139 

752,410,647 

179,073,735 

1911 

3,687,072 

802,689,471 

191,040,094 

1912 

3,807,972 

845,032,685 

201,117,778 

1913 

3,925,520 

885,708,971 

210,798,735 

1914 

3,723,542 

831,880,713 

197,987,611 

1915 

3,544,935 

770,667,740 

183,418,922 

1916 

3,455,906 

758,385,090 

180,495,651 

1917 

3,425,739 

778,446,994 

185,270,384 

INDUSTRIAL    INSURANCE    IN    FORCE    IN    THE    UNITED 

KINGDOM 


Number  of  Policies 
in  Force 

Amount  of  Insurance  in  Force 

Year 

Pounds 

Dollars 

1911 

35,475,381 

353,109,702 

1,719,644,239 

1912 

36,162,031 

359,538,089 

1,750,950,498 

1913 

37,556,248 

428,690,925 

2,087,724,780 

1914 

38,004,956 

433,900,645 

2,113,096,117 

1915 

44,673,399 

515,640,005 

2,511,166,800 

1916 

50,359,908 

585,925,630 

2,853,457,818 

136 


NATIONAL  HEALTH  INSURANCE  IN 
GREAT  BRITAIN,  1911-1919 

On  account  of  the  war,  the  experience  under  the  British  health 
insurance  acts  has  naturally  been  rather  inconclusive.  For  reasons  of 
a  thoroughly  false  economy  the  publication  of  annual  reports  on  the 
operation  of  the  health  insurance  act  was  discontinued,  but  a  con- 
solidated report  has  recently  been  issued  for  the  period  1914-17,  which 
though  quite  elaborate  in  matters  of  more  or  less  unimportant  office 
routine  leaves  practically  every  vital  question  involved  unanswered. 
From  a  variety  of  sources,  however,  it  is  not  diflicult  to  arrive  at 
reasonably  definite  conclusions  on  all  of  the  essential  matters  more  or 
less  in  controversy  in  this  country  at  the  present  time.  The  general 
impression  left  on  the  mind  of  the  impartial  reader  of  the  report  is  that 
the  main  efforts  of  the  commissions  are  concentrated  on  matters  of 
office  administration,  typical  of  a  vast  governmental  machinery, 
largely  unnecessary  for  the  end  in  view.  There  is  nothing  to  indicate 
that  the  main  purpose  involved  in  the  health  insurance  act,  namely, 
the  more  effective  medical  treatment  of  British  wage-earners,  is  suc- 
cessfully attained  at  reasonable  cost.  There  is  no  consolidated  state- 
ment of  the  number  of  persons  concerned  or  affected  by  the  act,  nor  of 
the  total  cost,  both  as  to  administration  and  benefits  rendered.  It  is 
self-evident,  however,  that  a  vast  amount  of  confusion  of  ends  and 
means  has  resulted  from  the  introduction  of  the  insurance  feature, 
totally  unrelated  to  the  question  of  medical  treatment  and  pecuniary 
support  during  illness  of  more  or  less  prolonged  duration.  No  analy- 
sis is  made  of  the  actual  experience  which  has  been  had,  such,  for  illus- 
tration, as  is  clearly  set  forth,  but  with  the  required  brevity,  in  the 
treatise  on  "Malingering,"  by  vSir  John  Collie.  Thus,  for  instance, 
according  to  the  returns  of  one  of  the  largest  friendly  societies  with 
regard  to  the  operation  of  the  National  Health  Insurance  Act,  accord- 
ing to  Sir  John  Collie,  the  per-capita  amount  paid  outside  of  a  given 
district  served  by  the  society's  medical  examiner,  or  one  in  which  there 
was  merely  haphazard  medical  attention  and  no  qualified  medical 
supervision,  was  12s.  lid.  for  men  and  13s.  10}  2d.  for  women.  In 
marked  contrast,  the  amount  paid  per-capita  inside  of  a  given  district 
served  by  the  society's  medical  examiner  and  subject  to  rigid  medical 
supervision  was  only  8s.  2d.  for  men  and  5s.  4V2fl.  for  women. 
Illustrations  of  this  nature  are  most  urgently  needed  in  aid  of  the  re- 

137 


quired  and  probably  more  or  less  drastic  reforms.  They  seem  to 
prove  conclusively  that  the  British  government  seriously  erred  in  the 
introduction  of  an  insurance  feature  when  much  more  eflective  and 
far-reaching  results  could  have  been  secured  through  a  thoroughly 
well-considered  state  medical  service;  for  the  latter  would  not  require 
one-tenth  of  the  governmental  machinery  found  necessary  in  the 
administration  of  the  National  Health  Insurance  Act.  The  extent  of 
that  machinery,  the  number  of  men  and  women  employed  for  adminis- 
trative purposes,  the  cost  of  administration  itself,  inclusive  of  the 
expenses  of  printing,  postage,  etc.,  are  not  set  forth  in  the  Consolidated 
Report,  although  such  information  is  required  as  a  matter  of  law  and 
good  business  administration  from  every  insurance  company  or  society 
subject  to  government  supervision  and  control. 

It  is  exceedingly  significant,  however,  that  there  should  have  been 
a  further  postponement  of  the  required  valuation  of  approved 
societies,  the  majority  of  which  are,  in  all  probability,  in  a  state  of 
doubtful  solvency.  Recalling  the  historical  fact  that  at  the  time 
when  the  health  insurance  act  went  into  operation  it  was  well  known 
that  many  societies  taken  over  by  the  act  were  technically  insolvent 
and  that  the  act  itself  was  looked  upon  rather  as  a  measure  to  avoid 
bankruptcy  on  the  part  of  these  otherwise  so  useful  and,  in  fact,  in- 
dispensable institutions,  it  is  difficult  to  avoid  the  conclusion  that 
the  required  actuarial  valuations  have  not  been  forthcoming  for 
reasons  of  governmental  policy.  The  amount  of  reserve  liability 
assumed  by  the  government  at  the  time  w^as  of  truly  colossal  propor- 
tion, but  the  facts  with  reference  thereto  were  never  thoroughly 
understood  by  the  British  public.  Quite  recently  in  connection  with 
the  amended  National  Health  Insurance  Bill  a  request  was  made  for 
£400,000  additional  per  annum,  equal,  as  pointed  out  by  the  New 
Statesman,  of  December  1,  1917,  "to  a  capital  gift  of  £8,000,000."* 
As  observed  in  the  same  publication,  the  new  measure,  however,  is 
in  no  sense  remedial  of  the  larger  deficiencies  and  failures  of  the  act 
of  1911,  and,  as  further  observed,  the  financial  position  of  the  entire 
national  health  insurance  is,  indeed,  "one  of  considerable  gravity." 
It  was  conceded  that  the  contributions  from  both  employers  and 
employed  could  not  possibly  be  increased  above  the  amount  of 
£18,500,000  a  year.  The  state  contribution  as  originally  agreed  up- 
on, including  all  administrative  expenses,  was  to  have  been  under 

♦According  to  a  statement  made  by  Major  Waldorf  Astor  in  the  House  of  Commons  on  April  7, 
1919.  the  total  amount  raised  on  account  of  the  Act  of  1911,  to  and  including  March,  1919,  was  one 
hundred  and  five  million  pounds,  of  which  forty  million  pounds  was  by  grants  made  by  Parliament  in  the 
furtherance  of  plans  and  purposes  which  would  otherwise  have  failed  on  account  of  insufficient  con- 
tributions. All  grants-in-aid  are  no  more  and  no  less  than  poor-relief  in  disguise.  All  such  grants  are 
financial  benefits  for  which  no  adequate  direct  return  is  made  by  the  beneficiary. 

138 


£4,000,000  per  annum.  This,  the  New  Statesman  points  out,  has 
already  been  increased  by  successive  new  subventions  to  over 
£5,000,000  in  1916,  making  the  receipts  £23,500,000.  The  amount 
spent  in  that  year  in  sickness  and  disablement  benefit  (£6,000,000), 
medical  services  and  drugs  (£4,800,000),  maternity  benefit  (£1,250,- 
000), sanatorium  benefit  (£750,000),  and  the  very  heavy  administration 
expense  (£2,250,000)  totaled  no  less  than  £15,050,000.  This  per- 
mitted the  investment  of  little  more  than  £8,000,000,  which  is 
apparently  considerably  less  than  the  amount  required  by  the  actuarial 
calculations  to  make  the  sinking-fund  payments  or  the  necessary 
provision  for  future  claims.  This  precarious  condition  is  complacently 
ignored  in  the  Consolidated  Report,  it  being  said  that  "In  the  normal 
course  the  first  valuations  of  approved  societies  would  have  become 
due  to  be  taken  as  of  July  15,  1915,  but  in  order  to  avoid  a 
special  balancing  of  the  accounts  of  societies  not  otherwise  required, 
they  were  postponed  to  the  following  31st  of  December.  Long,  how- 
ever, before  this  date  it  became  evident  that  a  further  postponement 
would  be  unavoidable.  Legislation  was  needed  to  remedy  certain  de- 
fects of  the  original  structure,  which  if  left  uncorrected  would  have  led 
in  some  cases  to  the  declaration  of  unmerited  deficiency  and  consequent 
hardship  to  the  members  concerned.  For  these  and  other  reasons," 
according  to  the  chief  actuary  of  the  commission,  "it  seemed  clear  that 
there  was  no  prospect  that  the  valuations  could  be  undertaken  during 
the  War,"  and  under  the  statutory  powers  conferred  upon  the  commis- 
sioners they  were  merely  postponed  without  reference  to  any  future 
date.  Such  a  condition,  if  pertnitted  in  the  case  of  life  insurance  com- 
panies, would  readily  be  recognized  as  a  national  scandal.  Such  a  policy 
of  delay  cannot  otherwise  than  imperil  seriously  the  future  financial 
interests  of  millions  of  members  of  societies  in  good  standing  and  of 
unquestionable  actuarial  solvency.  If  the  assumption  of  the  Fabian 
Research  Department  Committee  of  Inquiry  is  correct,  that  the  sum 
of  the  deficiency  in  the  first  completed  year  was  no  less  than  £700,000, 
it  requires  no  extended  knowledge  of  actuarial  methods  to  convince 
even  the  most  optimistic  in  matters  of  government  finance  that  the 
financial  future  of  national  health  insurance  in  Great  Britain  is  decided- 
ly discouraging,  more  so  in  view  of  the  enormous  new  liabilities  in  conse- 
quence of  the  war,  which  practically  preclude  a  liberal  viewpoint  in 
all  matters  of  financial  readjustment.  As  observed  in  the  discussion 
in  the  New  Statesman,  "How  much  should  be  added,  as  a  result  of 
the  war,  by  reason  of  the  depreciation  in  capital  value  of  the  fifty  mil- 
lion pounds'  worth  of  securities  that  will  presently  be  held  by  the 
commission  it  is  not  possible  to  compute,  because   it  is  not  publicly 

139 


known  to  what  extent,  if  any,  the  investments  have  been  made  in 
securities  not  redeemable  at  par." 

If  such  an  admission  were  made  in  behalf  of  even  a  single  life  insur- 
ance company  refusing  to  publish  the  full  details  of  its  investments 
and  of  making  the  required  annual  or  quinquennial  valuation,  there 
would  be  an  immediate  demand  for  an  official  inquiry  and  in  all  proba- 
bility an  application  for  a  receivership. 

The  Consolidated  Report  fails  to  present  in  concise  and  readily 
understood  language  a  full  account  of  the  general  status  of  national 
health  insurance  in  its  direct  relation  to  the  public.  As  pointed  out 
in  this  connection,  however,  in  the  article  in  the  New  Statesman,  of 
December  1,  1917,  "Voluntary  insurance  under  the  new  scheme  is  to 
be  further  restricted;  Maternity  Benefit  will  henceforth  not  be  payable 
until  42  (instead  of  26)  payments  have  been  made;  married  women 
are  to  be  tempted  to  commute  all  future  claims  for  a  new  'Marriage 
Benefit'  of  2  pounds,  with  one  year's  eligibility  for  Medical  and 
Sanatorium  Benefit;  the  contributions  paid  by  employers  and  em- 
ployed on  derelict  cards  are  now  confiscated;  and  the  privilege  ac- 
corded to  employees  who  themselves  pay  wages  during  sickness  is 
withdrawn."  In  contrast,  practically  every  progressive  life  insurance 
company  and  fraternal  society  has  been  making  voluntary  conces- 
sions, and  frequently  of  the  most  liberal  nature,  to  its  membership. 
Private  insurance  has  continuously  made  progress  in  the  direction  of 
low^er  rates,  larger  returns,  more  liberal  policy  provisions,  etc.  The 
tendency  of  national  health  insurance  in  England,  at  least,  seems  to 
lie  decidedly  in  the  opposite  direction.*  Aside  from  the  imminent 
risk  of  actuarial  insolvency,  in  the  words  of  the  New  Statesman, 
"Practically  none  of  the  fundamental  drawbacks  and  none  of  the 
serious  injustices  of  the  scheme  have  been  remedied,"  and  the  new 
measure,  "leaves  untouched  both  the  grievances  of  the  doctors  and  the 
still  more  serious  failure  of  the  Commission  to  supply,  as  the  Act 
promised,  'adequate'  medical  treatment;  that  the  provision  of  appli- 
ances and  medicines  is  still  unfairly  restricted;  that  the  practical 
breakdow^n  of  the  campaign  against  Tuberculosis  remains  unremedied ; 
that  the  autocracy  of  the  Approved  Societies  formed  by  the  great 
Industrial  Insurance  Companies  for  their  own  purposes  is  left  un- 
changed ;  that  at  least  half  a  million  women  of  the  same  class  as  the  rest 
are  still  excluded  from  the  Maternity  Benefit;  that  the  Deposit  Con- 
tributors are  still  unprovided  with  anything  that  can  be  called  insur- 
ance;  that  the  economic  absurdity  of  compulsorily  abstracting  a  loaf 

*For  a  discussion  of  the  German  experience  since  the  outbreak  of  the  war,  see  "The  Failure  of 
German  Compulsory  Health  Insurance. — A  War  Revelation,"  by  Frederick  L.  Hoffman,  reprinted  by 
the  Prudential  Press.  1918. 

140 


of  bread  a  week  from  hundreds  of  thousands  who  have  demonstrably 
not  enough  to  live  on  continues  unchanged ;  and  that  the  Commission 
has  failed  to  solve  the  problem  of  the  casual  labourer,  for  which 
Parliament  gave  it  practically  unlimited  powers."  This  formidable 
indictment  against  the  act  to  meet  any  and  all  reasonable  expecta- 
tions is  not  overdrawn;  in  fact,  in  the  article  in  the  New  Statesman  it 
is  well  said,  "Above  all  stands  the  failure  of  the  scheme  as  a  measure  of 
Public  Health,  which  the  present  Bill  almost  necessarily  ignores." 
Yet  that  is  precisely  the  argument  continuously  brought  forward  in 
this  country  in  behalf  of  the  plea  for  the  adoption  of  a  corresponding 
system,  primarily  as  a  measure  designed  to  improve  the  health  of 
wage-earners  and  their  dependents.  The  New  Statesman  is  of  the 
deliberate  opinion  that  the  British  Health  Insurance  Act  "has  not  had 
any  appreciable  effect  in  preventing  disease,  in  diminishing  Infant 
Mortality,  or  in  encouraging  hygienic  ways  of  living." 

The  reports  of  the  Registrar-General  are  convincing  evidence  in 
support  of  this  conclusion.  Aside  from  the  overwhelming  proof 
provided  by  the  experience  at  large,  the  crude  death  rate  from  tuber- 
culosis, limited  to  females,  as  a  more  accurate  measure  on  account  of 
the  disturbing  effects  of  the  war,  was  1 19.4  per  100,000  during  the  period 
1911-14.  For  1915  the  rate  was  123.7,  and  for  1916  123.4;  if  limited 
to  the  important  age  period  of  15-20,  the  rate  for  England  and  Wales 
increased  from  122.5  during  1911-14  to  138.7  during  1915  and  146.9 
during  1916.  There  is  nothing  in  the  reports  of  the  Registrar- 
General  to  indicate  that  there  has  been  observed  to  obtain  a  direct 
relation  between  health  conditions  throughout  England  and  Wales 
and  the  operation  of  the  National  Health  Insurance  Act.  In  com- 
menting upon  the  increase  in  the  mortality  from  tuberculosis,  it  is 
said  that  "It  is  quite  possible,  therefore,  that  with  the  return  to  these 
conditions  (those  of  peace)  the  fall  in  the  tuberculosis  mortality  may 
be  resumed,  though  whether  this  will  be  so  must  largely  depend  upon 
the  nature  of  the  peace  conditions  to  be  established."  Nothing 
commendatory  is  said  of  national  health  insurance  in  either  the 
reports  of  the  Registrar-General  for  all  of  the  years  since  national 
health  insurance  came  into  operation  or  in  the  large  number  of  local 
health  reports  for  representative  cities  and  towns  throughout  the 
United  Kingdom.  There  is  available,  however,  a  frank  statement  by 
the  Medical  Officer  of  Health  of  Rochdale,  that,  according  to  his 
experience,  "Health  Insurance  as  now  in  operation  in  this  country  is 
simply  a  gigantic  fraud."  He  also  observes  that  the  people,  in  his 
opinion,  are  worse  doctored  than  ever  before  and  at  the  maximum 
cost  of  irritation.     He   is,   therefore,   of  the   opinion   that   the  only 

141 


solution  of  the  difficulty  may  be  found  in  a  modified  state  medical 
service. 

The  National  Health  Insurance  Act  of  Great  Britain  is  rather  an 
immense  mass  of  minute  regulations,  rules,  restrictions,  etc.,  than  a 
working  principle  of  effective  medical  care  for  the  benefit  of  those  most 
urgently  in  need  thereof.  The  administration  has  become  so  extremely 
complex  in  matters  of  detail  that  even  the  Consolidated  Statutes, 
Regulations  and  Orders  preclude  intelligent  analysis.  They  make  a 
volume  of  more  than  600  closely  printed  pages,  including  notes  and 
cross-references  indicative  of  practically  hopeless  confusion.  The 
same  conclusion  applies  to  the  Consolidated  Report  on  the  Adminis- 
tration of  National  Health  Insurance  for  the  period  1914-17.  There 
is  no  uniformity  in  the  presentation  of  the  facts  for  the  separate  con- 
stituent parts  of  the  United  Kingdom,  but  for  each  section  the  re- 
quired information  is  presented  in  accordance  with  the  viewpoint  of 
the  commission  in  charge.  The  summary  account  for  the  entire  coun- 
try by  the  Joint  Committee  is  practically  limited  to  actuarial  considera- 
tions. The  official  Hterature,  including  the  acts  of  Parliament,  the 
innumerable  regulations  and  orders,  makes  an  intelligent  analysis 
practically  hopeless,  even  on  the  part  of  one  thoroughly  familiar  with 
insurance  methods  and  results.  In  addition  to  a  mass  of  current 
reports  a  number  of  important  special  investigations  have  been  made 
by  departmental  committees  on  Approved  Society  Finance;  the  Drug 
Tariff  under  the  National  Insurance  Act;  the  Application  of  the  Na- 
tional Insurance  Act  of  191 1  to  Outworkers  in  Ireland ;  Sickness  Benefit 
Claims,  Investments,  etc.  Aside  therefrom,  information  in  minute 
detail  has  been  published  on  the  decisions  and  appeals  on  matters  in 
controversy  and  on  the  reports  of  inquiries  and  appeals  under  the  medi- 
cal benefit  regulations.  No  thoroughly  digested  financial  accounts 
however  have  been  published  for  recent  years,  but  separate  con- 
sideration has  been  given  to  the  auditing  of  certain  accounts,  and 
of  the  accounts  showing  the  amount  of  securities  held  by  the  National 
Debt  Commissioners  as  investments  for  money  forming  part  of  the 
National  Health  Insurance  Fund.  Half  a  thousand  circulars  or  more 
have  probably  been  published  on  one  phase  of  the  administration  or 
another,  all  indicative  of  the  extreme  complexity  and  resulting  costli- 
ness of  the  administration  of  an  act  ostensibly  intended  to  secure  the 
required  benefits  at  minimum  expense  but  with  a  maximum  of 
interference  with  the  private  life  and  the  rights  and  privileges  of  the 
people  concerned. 

After  all,  every  rule  or  regulation  is  more  or  less  in  the  nature  of 
the  statutory  control  and  abridgment  of  the  liberty  of  the  subject. 

142 


Every  modification  in  rules  and  regulations  involves  an  additional 
burden  in  the  daily  life  of  the  people,  and  to  that  extent  constitutes  a 
hindrance  of  possibly  serious  social  concern.  In  no  direction  has  this 
become  more  evident  than  in  the  medical  administration  of  the  act, 
which  has  largely  diverted  the  interests  of  the  medical  profession  from 
matters  relating  to  the  advancement  of  medicine  as  a  healing  art  to 
economic  considerations  of  payments,  adjustment  of  claims,  conflicts  of 
interest,  and  all  such  questions  as  are  now  covered  by  special  circulars  or 
memoranda,  special  rules  and  regulations,  as  for  illustration,  sickness 
and  disablement  benefit  during  pregnancy,  conditions  under  which  late 
entrants  over  seventeen  are  entitled  to  the  full  rate  of  sickness-benefit, 
arrears  of  alien  members,  arrears  of  persons  who  have  been  treated 
provisionally  as  out  of  insurance,  alterations  in  the  registers  of  societies 
consequent  upon  changes  in  membership;  members  suspended  from 
medical  and  sanatorial  benefit  on  account  of  arrears,  position  of  alien 
enemies  under  the  national  insurance  act,  medical  certification  and 
supervision  of  claims  for  sickness  and  disablement  benefit,  rate  of 
benefit  in  certain  cases  in  which  arrears  are  discharged  or  contribution 
cards  are  surrendered  late,  notification  by  societies  to  insurance  com- 
mittees of  changes  affecting  the  index  register,  identification-marks 
on  contribution  cards,  controversies  between  approved  societies,  notifi- 
cation of  expulsions  or  withdrawals  of  members  of  approved  societies, 
provisions  as  to  behavior  during  sickness,  suspension  of  married 
women,  continued  payment  of  sickness  or  disablement  benefit  to 
persons  permanently  incapable  of  following  their  ordinary  occupa- 
tion, the  position  of  persons  who  have  lapsed  from  insurance  and 
again  become  employed  contributors,  and  thus  without  end. 

All  complexity  in  governmental  administration  implies  a  material 
abridgment  of  personal  freedom  in  contractual  relationships.  The 
efficiency  of  government  itself  in  the  furtherance  of  the  discharge  of 
its  legitimate  functions  is  hindered  to  the  extent  that  unnecessary 
powers  are  assumed,  largely  for  artificially  created  needs.  The  com- 
plexity of  national  health  insurance  foreshadows  in  course  of  time  as 
complete  a  breakdown  as  occurred  under  the  old  Poor  Law,  originally 
enacted  in  1601  as  the  43  Eliz.,  but  partly  abrogated  in  1834  under 
the  Reform  Acts,  as  the  sole  measure  of  saving  the  English  people 
from  economic  disaster  and  moral  ruin.*  Cause  and  efi"ect  in  matters 
of  this  kind  are  frequently  far  apart.  The  lamentable  consequences 
of  the  erroneous  calculations  underlying  the  administration  of  friendly 
societies  and  fraternal  organizations  operating  on  the  so-called  assess- 

*The  most  important  general  works  on  the  oUl  HnRlisli  Poor  I^tw  are  "The  I^nRlish  Poor,"  by 
"rhomas  Mackay.  London,  1889.  "History  of  the  KnKlish  Poor  Law,"  l)y  Sir  C".  NichoUs.  London, 
3  vols.,  1904.  and  the  classical  report  of  the  Commissioner!  on  the  Poor  I^ws,  London.  1834. 

143 


mcnt  plan  clearly  establishes  the  menace  involved  in  the  present 
situation  to  the  next  generation.  The  argument  that  there  is  no 
strong  opposition  to  national  health  insurance  is  quite  beside  the  point. 
There  was  no  opposition  to  the  old  Poor  Law  on  the  part  of  those  who 
were  under  its  malign  influences,  though  apparently  the  direct  benefi- 
ciaries of  an  ill-advised  bounty,  designed  rather  for  the  encouragement 
of  pauperism  than  for  its  suppression. 

A  new  act,  or  what  is  practically  a  new  act,  came  into  operation 
during  the  year  1918.  The  new  amendments  are  indicative  of  im- 
provements in  matters  of  detail,  but  the  extreme  complexity  of  the  act 
and  its  burdensome  administration  remain  largely  unchanged.  The 
new  law  is  merely  a  compromise,  not  likely  to  aid  materially  in  the 
solution  of  a  problem  due  primarily  to  the  fundamental  error  of 
attempting  to  evade  the  real  question  involved.  That  question  is 
the  rational  and  economical  medical  treatment  on  the  part  of  the 
State  of  those  who  for  a  large  variety  of  reasons  may  fmd  themselves 
in  the  social  or  economic  condition  that  renders  them  unable  to 
provide  such  treatment  in  their  own  way  and  at  their  own  expense. 
That  such  treatment,  in  a  more  restricted  sense,  is  poor-relief  under 
another  name  does  not  justify  the  confusion  of  the  public  in  matters 
so  vital  to  their  own  welfare  by  the  adoption  of  insurance  terms  and 
usages  strictly  inapplicable  to  the  particular  ends  in  view.  The 
same  reasoning,  of  course,  applies  to  a  universal  non -contributory 
old-age  pension.  To  call  poor-relief  in  old  age  a  pension  does  not 
relieve  the  recipient  thereof  from  the  consciousness  of  an  unearned 
benefit  or  advantage  conferred  by  the  liberality  of  the  State.* 

In  national  health  insurance  the  fundamental  element  involved  is 
medical  care.  All  other  considerations  are  subsidiary  functions  more 
or  less  germane  to  the  main  purpose  of  providing  rational  and  efficient 
medical  care  for  those  most  urgently  in  need  thereof  and  unable  to 
provide  such  care  or  treatment  on  their  own  part  and  at  their  own  ex- 
pense. Now,  every  question  of  medical  treatment  involves  a  second 
fundamental  principle  of  public  administration,  that  is,  the  voluntary 
or  compulsory  use  of  the  medical  profession  essential  to  the  proper  ful- 
filment of  the  obligations  incurred  by  the  State.  The  medical  pro- 
fession is  no  more  in  duty  bound  to  render  whatever  service  the  State 
may  require  of  it  than  are  architects,  law}'ers,  miners  or  engineers.  If 
required  to  perform  such  services  under  direct  compulsion  or  under 
semi-compulsion,  it  is  a  foregone  conclusion  that  the  services  will  not 
be  equal  in  value  to  the  voluntary  discharge  of  functions  rendered  in 
return  for  an  adequate  consideration.     While  at  first  intensely  opposed 

♦See  Professor  A.  V.  Dicey's  Harvard  Lecture  on  "Law  and  Opinion  in  England,"  page  xxxv. 

144 


to  national  health  insurance,  the  British  medical  profession  has  appar- 
ently adapted  itself  more  or  less  successfully  to  the  changed  order, 
which,  however,  by  every  indication,  is  merely  passing  through  a  tran- 
sitional stage  to  a  thoroughly  developed  plan  of  state  medical  care.  It 
is  therefore  of  interest  to  consider,  briefly,  the  present  viewpoint  of  the 
British  medical  profession,  as  set  forth  in  the  Interim  Report  on  the 
Future  of  the  Insurance  Acts,  by  the  Insurance  Acts  Committee,  pre- 
sented to  the  British  Medical  Association  during  the  two  years  1916 
and  1917,  or  preliminary  to  the  adoption  of  the  amendments  incor- 
porated in  the  new  National  Health  Insurance  Act  of  1918. 

Following  a  circular  letter  dated  January  23,  1917,  in  which  it  was 
intimated  that  a  full  inquiry  into  the  operation  of  the  insurance  acts 
would  probably  be  made  by  a  royal  commission  or  by  a  parliamentary 
committee  after  the  termination  of  the  war,  the  profession  was  invited 
to  give  expression  to  its  opinion  on  thirteen  carefully  considered  ques- 
tions. The  results  of  this  inquiry  were  summarized  in  a  communica- 
tion to  the  British  Medical  Association,  dated  June  16,  1916,  briefly 
reviewed,  as  follows: 

A  surprising  degree  of  favorable  opinion  was  disclosed,  as  said, 
"Upon  a  subject  which  five  years  ago  was  the  most  highly  contro- 
versial that  had  ever  been  before  the  profession,  and  which  still  in  some 
places,  and  everywhere  in  some  of  its  aspects,  excites  argument." 
The  inquiry  disclosed  first,  that  many  matters  which  at  the  beginning 
of  the  controversy  gave  rise  to  the  worst  apprehensions  have  assumed 
a  position  of  quite  minor  importance,  second,  that  the  general  system 
by  which  the  State  provides  medical  advice  and  treatment  under  the 
insurance  scheme  is  in  the  main  approved,  and  that  criticisms  have  a 
tendency  to  concentrate  on  a  comparatively  few  points  which,  though 
of  great  importance  and  indeed  vital  to  smooth  working,  are,  after  all, 
matters  of  detail  which  ought  to  be  capable  of  adjustment,  and,  third, 
that  there  is  a  large  body  of  opinion  in  favor  of  the  extension  of 
the  health-insurance  system  both  to  kinds  of  treatment  not  at 
present  provided  for  and  to  classes  of  persons  at  present  excluded 
therefrom. 

This  exceptionally  favorable  collective  viewpoint  on  the  part  of 
the  members  of  the  British  Medical  Association  cannot,  however,  be 
construed  as  thoroughly  representative  of  the  association  as  a  whole. 
Thus,  without  reference  to  the  areas  or  branch  associations  not  repre- 
sented in  their  replies,  it  is  shown  by  an  analysis  of  the  answers  made 
that  only  41  of  the  areas  were  satisfied  with  the  workings  of  the  act 
without  reservation,  that  44  were  satisfied  with  reservations,  that  30 
were  dissatisfied,  and,  that  10  were  sharply  divided  in  opinion. 

145 


It,  for  illustration,  is  frankly  conceded  in  the  report  that  many 
members  of  the  profession  "hold  that  the  service  is  inadequate  both  in 
extent  and  in  quality,  and  that  it  carries  with  it  a  taint  of  cheapness 
and  semi-charity  which  should  have  no  place  in  a  system  which  was  not 
provided  for  paupers  and  for  which  the  State  is  responsible." 

The  frank  admission  is  therefore  made  that  in  a  considerable 
measure  the  National  Health  Insurance  Act  conforms  to  the  principles 
of  poor-law  legislation  rather  than  to  the  conception  of  a  state  measure 
designed  to  encourage  the  thrift  function  in  its  relation  to  health  and 
disease.  This  viewpoint  is  sustained  by  the  evidence  contained  in 
the  further  report  of  the  Departmental  Committee  on  Approved 
Society  Finance  and  Administration,  in  which  it  is  said  that  "subse- 
quent to  the  issue  of  the  new  (health-insurdnce)  scheme  Parliament 
decided  to  place  at  the  disposal  of  Approved  Societies  a  sum  of 
£80,000,  or  about  $400,000,  to  be  used  as  a  Benevolent  Fund  for  the 
mitigation  of  arrears  in  cases  of  excessive  hardship.  This  grant  was 
administered  by  the  Societies  under  conditions  laid  down  by  the  Com- 
missioners, although  its  intention  and  effect  were  sensibly  to  reduce 
the  hardship  involved  in  the  heavy  reduction  of  benefits  to  those  per- 
sons who  had  suffered  the  misfortune  of  prolonged  unemployment. 
Its  administration  created  a  large  amount  of  extra  w^ork  and  this  has 
been  the  subject  of  general  complaint,  especially  from  those  centralized 
Societies  which  have  no  facilities  for  acquainting  themselves  with  the 
personal  circumstances  of  their  members.  The  Benevolent  Fund  grant 
was  repeated  for  the  contribution  year  ended  July,  1915,  the  amount 
being  fixed  at  £100,000  (about  $500,000).  In  the  following  year, 
in  view  of  the  financial  situation  of  the  country  and  of  the  general 
abundance  of  employment,  the  grant  was  suspended,  save  for  certain 
exceptional  cases  of  discharged  soldiers,  and  there  appears  to  be  a 
ver>^  general  desire  that  it  should  not  be  revived."  In  other  words, 
it  having  been  found  that  a  certain  proportion  of  the  membership  was 
unable  to  participate  in  benefits  on  account  of  the  non-payment  of 
contributions  in  consequence  of  unemployment,  a  free  grant  of  a  sub- 
stantial sum  was  made  by  Parliament,  which  on  other  grounds  might 
as  readily  have  been  provided  in  the  form  of  direct  poor-relief.  * 

An  equally  frank  confession  is  made  in  the  Report  of  the  Insurance 
Acts  Committee  of  the  British  Medical  Association,  that  "The  replies 
show  that  the  profession  entirely  agree  that  medical  benefit  is  inade- 

♦There  is  an  increasing  demand  in  Great  Britain  for  the  establishment  of  a  state  medical  service. 
Fundamental  changes,  however,  in  the  National  Health  Insurance  Act  will  involve  enormous  diffi- 
culties, which  may  preclude  radical  reforms.  Major  Waldorf  Astor  in  the  House  of  Commons,  on 
March  10,  1919,  is  on  record  as  having  said  that  "Preliminary  conferences  are  at  the  present  time 
taking  place  between  representatives  of  the  medical  profession  and  the  Commissioners,  preparatory  to 
a  general  review  of  the  medical  services  for  insured  persons,  including  questions  of  possible  extensions." 

146 


quate  in  extent;  that  there  is  still  prevalent  in  some  quarters  the  idea 
that  the  state  system  is  a  kind  of  'club  practice'  in  which  the  medical 
profession  is  being  asked  to  give  more  than  the  State  is  paying  for." 
The  observation,  however,  is  made  in  this  connection  that  "The  Com- 
mittee has  no  hesitation  in  saying  that  the  system  will  never  be  satis- 
factory either  to  the  public  or  to  the  medical  profession  until  both  are 
convinced  that  the  conditions  of  service  and  of  payment  are  such  that 
the  practitioner  has  no  reason  for  making  any  difference  between  the 
patient  who  pays  private  fees  for  attendance  and  the  patient  for  whose 
attendance  the  State  is  responsible."  There  is  thus  a  candid  admis- 
sion of  such  discrimination,  however  strenuously  this  may  be  denied 
by  doctors  whose  individual  opportunities  for  inquiry  may  have  been 
more  restricted. 

It,  however,  is  probably  a  safe  inference  that  in  the  majority  of 
cases  the  treatment  is  reasonably  satisfactory  and  that  the  conclusion 
of  the  committee  is  justified  that  insured  persons  have,  in  the  main, 
been  generally  satisfied  with  the  system  and  the  service  as  at  present 
available;  for,  it  is  said,  "Whole  classes  of  them  are  receiving  medical 
care  to  an  extent  which  they  had  never  previously  thought  of,  and  in 
many  thousands  of  cases  relations  of  confidence  are  being  established 
between  practitioner  and  insured  patient  of  a  kind  which  cannot  but 
lead  to  increased  usefulness."  It  would  have  been  extraordinary  if  a 
different  result  had  been  experienced.  Unquestionably  a  large  pro- 
portion of  wage-earners  are  now  receiving  systematic  medical  treat- 
ment at  minimum  cost;  but  such  a  result  could  have  been  much  better 
achieved  by  a  direct  state  medical  service  not  complicated  by  the  ex- 
tremely burdensome  and  hopelessly  involved  administrative  machinery 
of  the  National  Health  Insurance  Acts.  No  doubt  under  the  old  Poor 
Law  large  numbers  of  people  were  receiving  more  adequate  material 
support  than  if  the  workhouse  test  had  been  applied  to  all  as  in  the  case 
of  the  large  majority  of  able-bodied  poor.  It  is  not  necessarily  an  argu- 
ment in  favor  of  the  National  Health  Insurance  Act  that  in  the  main 
the  results  have  been  satisfactory  to  those  directly  concerned,  who  at 
best  and  at  most  pay  probably  not  much  more  than  half  the  actual 
cost,  the  remainder  being  assumed  by  the  employers  and  the  State.* 

Regardless  of  the  assertion  that  the  public  at  large  is  in  general 
well  satisfied,  it  is  pointed  out  by  the  Insurance  Acts  Committee  that 
all  physicians  in  actual  practice  "are  agreed  that  the  present  panel  sys- 

♦In  the  experience  of  Great  Britain  the  joint  contributions  ol  employers  and  employees  have  been 
materially  enlarged  by  Parliamentary  grants.  Out  of  a  total  of  one  hundred  und  five  million  pounds 
paid  in  benefits  since  the  commencement  of  the  Act  to  and  including  March  31,  1919.  forty  million 
pounds  or  33.4  per  cent,  was  provided  by  Parliament  through  general  taxation.  It  was  originally 
estimated  that  the  State  subsidy  would  not  be  more  than  28.769.000  pounds,  and  there  ore  the  strongest 
reasons  for  believing  that  the  grants  would  have  been  much  larger  if  the  constant  demands  for  an 
increase  in  benefits  and  a  broadening  of  the  privileges  under  the  Act  had  been  granted. 

147 


tcm  is  imperfect,"  and  it  is  therefore  argued  that  improvements  or 
extensions  are  desirable  and  that  modifications  should  be  made,  so  as 
to  attract  to  the  work  as  many  practitioners  as  possible.  A  consider- 
able number  of  the  profession,  both  consultants  and  general  practi- 
tioners, prefer  at  the  present  time  not  to  enter  into  any  agreement 
with  any  public  authority.  In  actual  practice  there  are  quite  a  large 
number  of  persons,  it  would  seem,  who  are  really  not  in  need  of  the 
provision  that  is  made  for  them  and  who  should  be  required,  or  at  least 
allowed,  it  is  said,  "to  arrange  for  medical  attention  as  ordinary  pri- 
vate patients."  In  other  words,  it  is  apparently  desired  that  those 
who  are  really  able  to  pay  should  not  avail  themselves  of  the  benefits 
of  the  National  Health  Insurance  Act,  but  should  be  by  law  precluded 
therefrom,  so  as  to  constitute  them  a  class  of  pay  patients,  thus 
increasing  the  source  of  income  of  both  the  physicians  off  and  the 
physicians  on  the  panel. 

That  those  who  because  of  their  poverty  and  economic  dependence 
are  most  urgently  in  need  of  systematic  medical  attention  and  at 
minimum  cost  are  not  being  effectively  provided  for  under  the  present 
system  is  made  clear  by  the  statement  on  the  part  of  the  Insurance 
Acts  Committee  that  "It  remains  for  the  Poor  Law  to  make  medical 
provision  for  those  with  no  means  of  support,  and  it  does  not  include 
certain  classes  of  poor  persons,  such  as  hawkers,  who  certainly  need 
help  to  secure  adequate  medical  attention."  It  is  said,  furthermore, 
that  "Neither  does  it  provide  for  the  dependents  of  insured  persons 
who  naturally  require  help  as  much  as  those  on  whom  they  are  depend- 
ent." But  it  is  said  that  it  is  not  to  be  supposed  "that  any  scheme  for 
national  health  insurance  can  at  once  be  made  such  as  to  include  all 
those  who  need  it  and  to  exclude  all  those  who  do  not  need  it."  Ap- 
parently the  former  constitute  a  much  larger  proportion  of  the  low- 
wage-earning  element  than  is  generally  assumed  to  be  the  case ;  in  fact, 
the  Insurance  Acts  Committee  draw  particular  attention  to  the  ur- 
gency of  the  inclusion  of  poor-law  patients  within  the  plan  and  scope 
of  national  health  insurance  legislation  in  the  following  statement: 
"There  remains  a  class  of  persons  who  normally  might  be  expected  to 
have  been  employed  contributors,  but  who,  usually  owing  to  some 
physical,  mental  or  moral  imperfection,  are  not  in  receipt  of  an  income 
and  are  provided  with  medical  treatment  through  the  Poor  Law.  It 
would  be  a  great  advantage  from  the  point  of  view  of  unification  of 
the  system  and  in  other  ways  if  these  persons  could  share  in  the  medical 
benefits  of  an  insurance  scheme,  the  'parish  doctor,'  as  such,  being 
abolished,  and  the  Guardians  of  the  Poor  being  placed,  as  regards  these 
persons,  in  the  same  position  as  the  employer  of  the  poorest  class  of 

148 


low-wage  earners."  The  evidence  could  not  be  more  conclusive  than 
this  statement,  from  a  trustworthy  and  semi-official  source,  that 
national  health  insurance  has  neither  done  away  with  poor-law 
medical  support  nor  is  aiming  directly  and  effectively  in  that  direction. 

Aside  from  this  rather  startling  admission,  it  is  also  conceded  by 
the  Insurance  Acts  Committee  of  the  British  Medical  Association,  that 
"The  services  rendered  to  insured  persons  under  the  existing  arrange- 
ments are  necessarily  limited.  Additional  services  are  available  to  a 
varying  extent  in  different  parts  of  the  country,  some  provided  by  the 
State,  others  by  charity,  others  having  to  be  paid  for."  This  state- 
ment is  in  flat  contradiction  of  the  assertion  frequently  made  in  this 
country  that  all  the  medical  needs  of  British  wage-earners  are  provided 
for  under  the  National  Health  Insurance  Act.  It  is  pointed  out  by 
the  committee  that  "It  is  an  almost  unanimous  opinion  in  the  pro- 
fession that  the  benefits  of  the  insurance  scheme  should  be  so  ex- 
tended beyond  domiciliary  attendance  as  to  provide  under  proper 
safeguards,  as  a  right,  all  medical,  surgical,  or  special  facilities  and 
treatment  which  the  condition  of  the  insured  person  may  demand." 
Extended  benefits  of  this  character  are  enumerated  as:  (1)  consultant 
and  specialist  service,  (2)  institutional  treatment,  (3)  pathological  and 
clinical  laboratory  facilities,  (4)  X-ray  provision  both  for  diagnosis 
and  for  treatment,  (5)  special  forms  of  treatment,  such  as  massage 
and  electricity,  (6)  dental  treatment,  (7)  a  nursing  service,  (8)  advice 
with  regard  to  pregnancy  and  attendance  at  confinement  by  a  midwife 
with  emergency  attendance  by  a  practitioner.  In  other  words,  all 
that  is  really  vital  to  thoroughly  effective  medical  treatment  in  the 
more  serious  cases  of  prolonged  illness  is  not,  in  fact,  at  present  in- 
cluded within  the  provisions  of  the  National  Health  Insurance  Acts. 
The  conclusion  is  therefore  entirely  justified  that  the  major  portion  of 
the  medical  service  consists  of  relief  of  a  more  or  less  trivial  character 
in  matters  of  temporary  indisposition,  upon  which  huge  sums  of  money 
are  squandered  and  a  vast  amount  of  valuable  professional  time  and 
equally  vast  sums  in  the  form  of  pecuniary  assistance,  with  an  ap- 
palling and  largely  unnecessary  loss  of  valuable  working-time. 

If  the  plan  of  national  health  insurance  had  been  intelligently 
conceived,  there  would  have  been  a  universal  and  free  provision  for 
the  medical  needs  just  enumerated  as  a  matter  of  life-saving  and  health- 
conservation,  rather  than  the  existing  provision,  largely  for  trivial 
complaints  and  a  direct  inducement  to  wide-spread  malingering,  more 
or  less  difficult  of  precise  ascertainment. 

That  these  conclusions  are  in  strict  conformity  to  tlie  facts  is  per- 
haps best  illustrated  by  the  statement  on  the  part  of  the  Insurance 

149 


Acts  Committee  that  among  the  extra  or  essential  services  not  at  pres- 
ent provided  for  is  the  administration  of  anesthetics.  It  is  said  in 
the  report  that  "The  Committee  has  always  contended  and  is  still  of 
the  opinion  that  the  administration  of  a  general  anesthetic  should  not 
be  considered  to  be  included  in  the  practitioner's  contract,  but  should 
be  provided  as  extra  services." 

Since  much  in  this  country  has  been  made  of  the  possibilities  of 
consulting  clinics,  it  is  interesting  to  note  that  the  Insurance  Acts 
Committee  expressed  itself  as  opposed  to  this  class  of  institutions,  on 
grounds  not  very  clearly  set  forth  in  the  report.  After  referring  to  the 
fact  that  co-operative  clinics  of  a  general  character,  or,  more  precisely, 
medical  centers  where  groups  of  practitioners  would  see  all  or  most  of 
their  insured  patients,  had  been  advocated,  it  is  said  that  "The  objec- 
tion to  such  an  arrangement  is  that  it  necessarily,  to  some  extent  at 
least,  detracts  from  the  more  intimate  personal  relationship  between 
practitioner  and  patient,"  and  that  insurance  practice,  under  such 
conditions,  "might  tend  to  become  more  differentiated  from  ordinary 
family  private  practice  than  need  be  the  case."  The  conclusion  is 
therefore  advanced  that  "It  would  be  undesirable  to  establish  such 
clinics  as  a  universal  or  ordinary  arrangement,"  although  it  is  con- 
sidered probable  that  they  w^ould  otherwise  be  advantageous,  espec- 
ially in  neighborhoods  "of  a  poor  or  industrial  character,  where  the 
number  of  patients  is  large  and  where  the  supply  of  practitioners  or  of 
consulting-room  space  is  meager,  and  where  this  method  of  seeing 
patients  w'ould  not  differ  materially  from  that  already  in  vogue,  in 
which  the  establishment  of  such  clinics  would  be  helpful  to  practi- 
tioners and  patients  alike  until  conditions  alter."  The  objections 
advanced  cannot  be  considered  valid,  if  such  institutions  on  general 
grounds  are  desirable.  The  underlying  fear  on  the  part  of  the  medical 
profession  is  that  private  or  pay  patients  may  realize  that  they  are 
securing  no  particular  advantages  over  insured  patients.  This  view- 
point, of  course,  merely  accentuates  the  clearly  realized  limitations 
of  medical  services  under  the  insurance  acts  as  compared  or  contrasted 
with  medical  service  available  to  private  patients  or  to  those  who 
employ  physicians  in  their  own  way  and  at  their  own  cost. 

It  would  be  quite  impossible  to  present  with  the  required  brevity 
the  details  of  the  so-called  panel  system.  While  apparently  there  is 
free  choice  of  physicians  on  the  panel  on  the  part  of  the  insured  popu- 
lation, the  choice,  of  course,  is  limited  to  such  physicians  as  accept 
service  on  a  per-capita  basis  under  the  insurance  act.  Since  some 
physicians  are  naturally  preferred  to  others,  the  number  of  patients 
may  in  certain  cases  be  very  large  and  in  other  cases  relatively  small. 

150 


The  question  has  therefore  arisen,  and  it  is  one  of  very  material  im- 
portance, whether  any  limitation  should  be  placed  upon  the  number 
of  insured  persons  whom  any  practitioner  may  accept  for  treatment. 
It  is  said  in  the  report  of  the  Insurance  Acts  Committee  that  "It  is 
undesirable  that  a  practitioner  should  be  responsible  for  a  number  of 
patients  which  it  is  beyond  his  capacity  to  deal  with."  *  The  argument, 
however,  is  advanced  that  no  one  can  gauge  that  capacity  so  well  as 
the  practitioner  himself,  and,  of  course,  the  persons  to  whom  his  ser- 
vices are  rendered.  This  conclusion,  however,  by  no  means  follows, 
and  entirely  disappears  upon  impartial  inquiry  into  the  facts.  Self- 
interest  on  the  part  of  the  physician  would  naturally  suggest  the  largest 
possible  number  of  names  on  his  panel,  while,  on  the  other  hand,  a 
physician  of  exceptional  ability  would  attract  to  himself  a  larger  num- 
ber of  patients  on  the  basis  of  panel  service  than  could  properly  be 
taken  care  of,  at  least  without  a  number  of  thoroughly  qualified  assist- 
ants. The  Committee  suggests  that  it  might  be  desirable  to  concede 
to  insured  persons  the  right  to  change  their  doctor  twice  a  year  or  even 
quarterly  without  consent,  instead  of  only  once  a  year,  as  at  present. 
Having  made  their  choice  of  a  physician,  and  probably  in  most  cases 
without  previous  knowledge  or  extended  experience,  the  choice  under 
the  existing  system  must  be  adhered  to  for  another  year,  although 
often  contrary  to  the  best  judgment  of  the  insured,  for  some  reason 
or  other  dissatisfied  with  the  services  rendered. 

According  to  the  analysis  of  the  inquiry  sent  out  by  the  Insurance 
Acts  Committee,  seventy  areas  making  replies  voted  for  no  limitation 
as  to  the  number  of  persons  any  given  doctor  might  have  on  his  panel  list, 
but  thirty-three  areas  voted  in  favor  of  such  a  limitation;  the  number 
suggested  varying  from  5,000  (wholly  panel)  to  1,000  in  the  country 
and  1,500  in  the  towns  (when  accompanied  by  other  practice).  The 
term  "wholly  panel"  means  a  medical  practice  exclusively  devoted  to 
insurance  patients.  A  maximum  limit  of  5,000  names  would  indicate 
the  assumption  of  a  practice  entirely  beyond  the  possibility  of  satis- 
factory service.  The  panel  committee  for  the  County  of  London  in 
a  memorial  dated  June,  1917,  observed  in  this  connection  that  "It  is 
undesirable  that  a  practitioner  should  be  responsible  for  a  number  of 
patients  which  it  is  beyond  his  capacity  to  deal  with.  In  practice, 
however,  it  is  almost  impossible  to  gauge  the  capacity  in  this  connec- 
tion of  individual  practitioners.  It  may  eventually  be  necessary  to 
fix  some  limit  to  the  number  of  insured  persons  which  may  be  accepted 
by  any  panel  practitioner.     In  view  of  the  unequal  distribution  of 

♦The  experience  under  social  health  insurance  is  entirely  conclusive  as  to  the  considerable 
number  of  cases,  in  which  a  panel  practice  is  too  large  for  the  adequate  treatment  and  proper  considern- 
tlon  of  patients.   For  convincing  evidence  see"Health  and  the  State,"  by  Pr  W.  A.  Hrend,  London,  1917 

151 


medical  men  in  difTcrcnt  areas  of  London  and  the  varying  capacities 
of  practitioners,  it  does  not  appear  desirable  at  the  present  time  to 
secure  any  uniform  limitation  of  lists.  The  difficulty  arising  from 
excessively  large  lists  is  to  a  certain  extent  overcome  by  the  automatic 
action  of  free  choice  of  doctor,  and  would  be  considerably  lessened  if, 
as  a  result  of  improvements  in  the  service,  a  greater  number  of  prac- 
titioners should  accept  service  under  the  Act." 

As  a  concrete  illustration  reference  may  be  made  to  a  discussion 
of  actual  experience  under  the  National  Health  Insurance  Act  by  Dr. 
E.  F.  Pratt,  in  the  British  Medical  Journal,  March  21,  1914.  Accord- 
ing to  Dr.  Pratt,  during  the  last  six  months  of  1913  he  paid  professional 
visits  and  gave  professional  consultations  to  the  large  number  of  3,665. 
This  for  151  working-days  would  average  24  calls  a  day.  For  this 
service  he  received  approximately  £305,  or  for  each  visit  or  con- 
sultation "the  magnificent  fee  of  Is.  8d."  But  in  addition  to  his 
insurance  practice  Dr.  Pratt  also  carried  on  his  private  practice,  so 
that  the  actual  number  of  patients  seen  and  treated  per  day  would  be 
even  larger,  and  possibly  considerably  so.  It  is  evident  from  the  state- 
ment rendered  that  while  there  has  been  a  moderate  increase  in  com- 
pensation, there  has  been  a  disproportionate  increase  in  the  services 
rendered  therefor,  or,  in  the  doctor's  own  words,  "It  does  not  require 
a  very  mathematical  brain  to  see  that  the  increase  of  work  is  out  of 
all  proportion  to  the  increase  in  income."  And,  further,  he  points 
out,  "It  is  natural,  then,  that  we  should  feel  it  galling  sometimes  to 
have  to  attend  people  as  panel  patients  who  are  quite  in  a  position 
to  pay  bills  as  private  patients."  He  might  also  have  said  that  in  all 
probability  a  large  number  of  attendances  were  for  very  trivial  causes. 
Out  of  3,665  visits  and  consultations  during  the  last  six  months  of  1913, 
the  number  of  treatments  on  account  of  ailments  of  the  respiratory 
tract  was  477,  or  13  per  cent.,  of  the  gastro-intestinal  tract,  412,  or 
11.2  per  cent.,  and  on  account  of  rheumatism,  more  or  less  alleged, 
356,  or  9.7  per  cent. 

Of  course  such  an  experience  as  this  is  not  necessarily  conclusive, 
but  it  is  certainly  suggestive  of  serious  practical  difficulties  not  antici- 
pated on  the  part  of  those  responsible  for  the  framing  and  passage  of 
the  National  Health  Insurance  Act.  The  shortcomings  of  the  act 
afTect  most  seriously  the  element  most  urgently  in  need  of  qualified 
attention,  but,  as  observed  in  this  connection  by  Dr.  Pratt,  "The  posi- 
tion of  the  deposit  contributor  is  shamefully  pitiful."  The  prevailing 
opinion  is  that  the  present  method  of  remuneration  is  decidedly  inade- 
quate. It  is  also  argued,  and  on  the  basis  of  substantial  evidence, 
"That  the  present  system  of  calculation  and  payment  produces  almost 

152 


a  maximum  of  confusion  and  uncertainty  with  a  minimum  of  satis- 
faction." It  is  said,  furthermore,  tliat  the  system  is  extremely  com- 
plicated, but  that  nevertheless  the  opinion  of  practitioners  is  almost 
universally  in  favor  of  the  capitation  system.  From  only  one  area 
came  the  suggestion  for  a  state  medical  service.  An  increase  in  the 
rates  paid  was  therefore  urgently  recommended,  or,  specifically,  from 
the  present  rate  of  7s.  per  capita  to  from  10s.  to  15s.  Upon  this  impor- 
tant question  the  British  Medical  Journal,  in  an  editorial  in  the  issue  of 
March  30,  1918,  brought  forward  a  strong  argument  in  favor  of  the 
acceptance  on  the  part  of  the  Government  of  the  recommendations  of 
the  Insurance  Acts  Committee,  as  instructed  by  representatives  of 
the  local  medical  and  panel  committees,  that  the  capitation  fee  be  at 
once  raised  from  7s.  to  10s.  This  request,  however,  was  flatly  refused 
by  the  chairman  of  the  National  Health  Insurance  Joint  Committee, 
who  considered  the  evidence  advanced  as  quite  inconclusive,  except 
on  the  most  general  grounds  applicable  to  all  conditions  of  society 
affected  adversely  by  the  higher  cost  of  living,  the  war,  etc.  He  was 
willing,  however,  he  said,  to  consider  individually  the  question  of  doc- 
tors with  small  incomes,  but  he  was  not  prepared  to  consider  any  gen- 
eral increase,  even  a  small  one,  "on  account  of  the  changed  conditions 
and  consequent  alterations  in  the  liabilities  of  insurance  practitioners 
due  to  the  war."  He  declined  also  to  undertake  any  partial  revision 
of  the  general  conditions,  in  order  to  meet  the  special  claims  of  rural 
doctors,  that,  he  said,  must  wait  until  the  general  revision.  Regardless, 
therefore,  of  the  unquestionable  necessity  of  a  thorough  reconsideration 
of  the  entire  question  of  per-capita  payments  for  medical  services, 
directly,  of  course,  related  to  the  question  of  efficiency  of  service,  the 
proposals  advanced  were  ruthlessly  set  aside  by  the  Government,  in 
disregard  of  the  fact  that  the  medical  profession  was  totally  unable 
to  extricate  itself  from  a  condition  of  more  or  less  serious  hardship  in 
a  sufficient  number  of  individual  cases  to  make  the  agitation  as  a  whole 
one  of  general  concern. 

The  experience  in  England  in  this  respect  is  an  almost  exact  repeti- 
tion of  the  difficulties  experienced  on  the  part  of  the  medical  profession 
on  the  Continent;  only,  in  the  case  of  Germany,  at  least,  and  in  certain 
large  cities,  the  struggle  of  the  doctors  for  adecjuate  compensation  has 
been  more  successful.  But  there  is  involved  in  this  a  serious  economic 
question  of  general  concern  to  the  public.  Ostensibly  at  the  outset 
a  much  cheaper  arrangement  than  the  one  prevailing  heretofore,  the 
constant  increase  in  cost,  partly  on  account  of  medical  attendance  and 
partly  for  other  reasons,  tends  persistently  in  the  direction  of  higher 
contributions,  and  assumes  a  proportion  of  the  current  earnings  totally 

153 


unanticipated.  The  increase  in  cost  benefits  not  the  most  deserving 
clement  of  wage-earners  and  their  dependents,  or  those  most  urgently 
in  need  of  qualified  medical  attendance  and  all  that  that  implies,  but 
rather  the  undeserving,  the  malingerer,  the  impostor,  or  that  large 
group  of  chronic  complainers  who  utilize  minor  ailments  and  indisposi- 
tions to  derive  pecuniary  benefits  from  a  fund  or  institution  to  which 
they  have  made  contributions  on  their  own  part  out  of  all  proportion 
to  the  advantages  secured. 

Whatever  views  may  be  held  as  regards  the  material  aspects  of  a 
professional  question,  it  is  self-evident  that  unless  the  medical  service 
is  adequately  remunerated  it  must  necessarily  suffer  a  substantial  de- 
cline. Men  cannot  be  expected  to  enter  a  profession  for  which  the  pre- 
requisite is  a  prolonged  and  costly  previous  education  with  the  possi- 
bility of  sufficient  earnings  frequently  deferred  until  well  advanced 
middle  life.  To  keep  abreast  with  medical  progress  involves  active 
participation  in  professional  discussions  and  a  practically  continuous 
education  through  more  or  less  expensive  periodicals,  text-books, 
postgraduate  courses,  etc.  It  is  therefore  of  the  utmost  importance 
that  the  remuneration  for  medical  services  should  not  only  be  reason- 
ably adequate,  but  liberal,  considering  the  very  great  value  of  such 
services  to  the  individual  and  the  community,  on  the  one  hand,  and 
the  serious  stress  and  strain  of  the  professional  life  of  the  medical 
practitioner,  who  ranks  second  to  none  in  public  usefulness,  on  the 
other. 

But  equally  important  is  the  question  of  adequate  medical  ser- 
vices, and  adequacy  must  certainly  more  or  less  depend  upon  the 
qualifications  of  those  who  are  willing  to  render  services  to  the  State 
under  conditions  likely  to  be  thoroughly  unsatisfactory,  if  the  re- 
muneration is  insufficient  or  if  other  burdensome  conditions  are  im- 
posed which  interfere  with  professional  efficiency.  These  difficulties 
are  largely  a  matter  of  self -adjustment  under  the  voluntary  system, 
which  regardless  of  many  and  serious  shortcomings  is  nevertheless  in 
the  main  a  satisfactory  one  to  a  large  majority  of  the  people  in  need  of 
medical  attendance  obtained  in  their  own  way  and  at  their  own  cost. 
No  state  regulations  or  state  control  can  possibly  meet  the  countless 
difficulties  of  delicate  adjustment  possible  in  private  practice,  but 
practically  out  of  the  question  under  a  more  or  less  autocratic,  burden- 
some and  complicated  system  of  national  health  insurance. 

An  excellent  illustration  of  this  difficulty  is  the  question  of  appli- 
ances, whether  surgical  or  otherwise,  which  it  is  the  duty  of  the  prac- 
titioner to  prescribe  in  cases  of  urgent  necessity.  According  to  the 
report  of  the  Insurance  Acts  Committee,  "The  supply  without  cost  to 

154 


the  patient  of  appliances  more  or  less  permanently  needed  is  wasteful, 
such  an  appliance  being  more  carefully  used  and  generally  more  appre- 
ciated by  the  patient  if  he  has  to  pay  for  it.  But  if  the  existing 
arrangements  were  materially  altered,  and  certainly  in  connection 
with  the  establishment  of  extra  services  for  insured  persons,  the  matter 
would  need  reconsideration."  While  granting  that  the  list  of  appli- 
ances at  present  provided  for  under  national  health  insurance  is  cer- 
tainly meager,  it  nevertheless  is  said  that  "to  add  to  this  list  under 
present  conditions  would  be  undesirable;"  in  other  words,  urgent 
necessity  is  sacrificed  to  pecuniary  expediency.* 

What  is  true  of  the  insufficiency  of  the  provision  for  appliances  is 
even  more  true  of  the  neglect  for  efficient  nursing  service.  As 
regards  the  treatment  of  tuberculosis,  which  under  the  National 
Health  Insurance  Act  is  made  a  matter  of  separate  consideration,  it  is 
frankly  conceded  that  the  provision  therefor  is  totally  inadequate  in  a 
large  number  of  cases;  but  it  is  said  in  the  report  of  the  Insurance 
Acts  Committee  that  "If,  as  is  so  often  the  case,  the  chief  need  is  for 
better  housing  conditions  or  for  extra  nourishment,  enquiry  should  be 
made  by  the  proper  authority  immediately  upon  notification  of  a  case, 
and  the  needs  supplied,  or  the  faulty  conditions  as  far  as  possible 
remedied,  or  the  patient  removed  if  necessary  from  them."  In  other 
words,  the  underlying  unsatisfactory  social  and  economic  conditions 
more  or  less  directly  responsible  for  the  excessive  frequency  of  tuber- 
culosis in  certain  localities,  or  certain  groups  of  wage-earners,  are 
recognized  as  being  of  paramount  importance,  but  the  problem  is  left 
unsolved.  Instead  of  aiming  persistently  at  better  housing  and  higher 
wages,  the  National  Health  Insurance  Acts  only  tend  to  ameliorate 
to  a  limited  degree  a  deplorable  economic  condition,  which  obviously 
is  the  responsible  cause,  and  the  mitigation  of  which  involves  heavy 
expenditures  though  not  providing  a  solution  satisfactory  to  those 
concerned. 

The  Insurance  Acts  Committee  is  opposed  to  the  view  that  the 
main  requirement  in  connection  with  tuberculosis  is  treatment  in  a 
sanatorium.  It  rather  endorses  the  conviction  which  has  been  gaining 
ground  during  recent  years  that  domiciliary  treatment  is  preferable 
in  a  large  number  of  cases,  not  only  for  economic,  but  also  for  medical 
reasons.  The  committee  observes  that  "The  administration  of  some 
Insurance  Committees  and  of  some  Public  Health  Authorities  in  this 
matter  is  far  less  efficient  than  that  of  others,  and  the  fact  that  these 
two  bodies  have  dual  and  overlapping  powers  is  inconvenient  and  un- 
desirable.    The  whole  system  requires  revision  in  the  light  of  expcri- 

♦See  "Health  and  the  State."  by  Dr.  W.  A.  Brend.  London,  1917. 

155 


encc,  atul  in  any  such  revision  it  is  essential  that  regard  shall  be  had  to 
the  siiKgcstions  made  in  the  preceding  paragraph  as  to  the  paramount 
importance  and  responsibility  of  the  general  practitioner  in  all  cases, 
as  well  as  of  other  medical  officers  in  many  cases,  should  be  recog- 
nized." 

There  has  been  an  increase  in  the  facilities  for  the  institutional 
treatment  of  tuberculosis,  but  progress  in  this  direction  has  fallen 
decidedly  short  of  expectations.  Between  1914  and  1917  the  number 
of  beds  in  approved  institutions  increased  from  9,200  to  11,700  in 
England  alone.  Considering  that  the  number  of  deaths  from  pul- 
monary tuberculosis  in  England  and  Wales  during  1916  w^as  41,545, 
which  at  the  minimum  ratio  of  at  least  ten  existing  cases  to  one  death 
implies  that  there  were  not  fewer  than  415,450  active  cases  of  tuber- 
culosis, the  provision  made  cannot  be  considered  adequate.* 

It  is,  of  course,  difficult  to  thoroughly  understand  the  local  situa- 
tion from  the  available  official  reports,  including  the  extended 
discussion  of  the  problem  in  the  Consolidated  Report  on  the  Adminis- 
tration of  National  Health  Insurance,  1914-1917,  but  the  impression  is 
not  one  of  positive  assurance  that  the  problem  of  adequate  institutional 
facilities,  even  for  advanced  cases,  is  being  properly  met,  after  some 
seven  years  of  operation  of  the  National  Health  Insurance  Acts  in  the 
United  Kingdom.  Allowance,  of  course,  must  be  made  for  the  war, 
but  it  requires  to  be  kept  in  mind  that  the  disease  during  the  last  few 
years  has  shown  a  measurable  tendency  towards  an  increase,  so  that 
the  urgency  for  more  adequate  institutional  provision  is  even  more 
apparent  at  the  present  time  than  in  the  past.f 

With  further  reference  to  domiciliary  treatment  it  should  also  be 
said  that  in  consequence  of  new  orders  and  regulations  on  the  part  of 
the  Local  Government  Board  a  broader  policy  has  been  developed, 
the  general  effect  of  which  has  been  "to  secure  that  the  Tuberculosis 
Officer  of  the  approved  tuberculosis  dispensary  is  placed  in  a  consulta- 
tive relationship  to  the  practitioners  carrying  out  domiciliary  treatment, 
and  that  domiciliary  treatment  is  thus  linked  up  with  the  tuberculosis 
scheme  of  the  Local  Authority  providing  the  dispensary  and  appoint- 
ing the  Tuberculosis  Officer,"  all  more  or  less,  however,  in  conformity 
with  the  earlier  plan  based  on  the  order  of  July,  1912. 


♦Numerous  complaints  have  been  made  against  inadequate  sanatoria  provision  for  tuberculosis 
and  non-conformity  to  the  statutory  requirements  of  the  Act  of  191 1.  In  the  House  of  Commons,  on 
May  8,  1918.  Mr.  Frederick  Roberts,  M.  P.,  asked  the  president  of  the  Local  Government  Board  if  his 
attention  had  been  drawn  to  the  inadequacy  of  the  accommodation  provided  in  Staffordshire  for  the 
treatment  of  insured  persons  suffering  from  tuberculosis;  and  if  so,  what  steps  he  proposed  to  take  to 
meet  the  requirements.  No  denial  was  made  of  the  fact,  but  a  promise  was  made  of  early  improve- 
ment in  the  existing  situation. 

tFor  a  discussion  of  the  recent  increase  in  tuberculosis,  see  The  Spectator  of  June,  19,  1919. 

156 


It  is  also  of  importance  that  under  Section  17  of  the  Act  of  1911, 
power  was  conferred  upon  each  insurance  committee  to  extend  at  its 
discretion  sanatorium  benefit  to  the  dependents  of  the  insured  persons 
resident  in  its  area,  or  to  a  class  of  such  dependents.  It  is  stated,  how- 
ever, in  the  Consolidated  Report  that  "Owing  principally  to  the  nature 
of  the  comprehensive  schemes  undertaken  by  County  and  County 
Borough  Councils  for  the  institutional  treatment  of  tuberculosis 
amongst  the  population  generally,  this  power  in  England  is  exercised 
by  very  few  Insurance  Committees,  and,  in  general,  dependents, 
together  with  other  non-insured  persons,  are  dealt  with  under  the 
scheme  of  the  County  or  County  Borough  Council  for  tuberculosis 
treatment." 

Since  so  much  has  been  expected  of  the  national  insurance  act  in 
the  prevention  and  control  of  tuberculosis,  it  is  especially  significant 
that  in  this  most  important  direction  the  results  are  also  decidedly 
unsatisfactory.  The  fundamental  principle  of  action  on  the  part  of 
the  authorities  is  that  "An  insured  person  is  not  entitled  to  sanatorium 
benefit  unless  recommended  by  the  Insurance  Committee  for  such 
benefit."  In  the  case  of  persons  moving  from  one  locality  to  another 
where  the  general  facts  and  personal  circumstances  of  the  case  are  more 
or  less  in  doubt,  it  is  self-evident  that  such  a  system  must  lead  to  much 
dissatisfaction;  in  other  words,  it  is  not  a  question  as  to  whether  in- 
stitutional care  is  required  in  the  opinion  of  a  qualified  medical  practi- 
tioner, whether  on  the  panel  or  not,  but  whether  the  case  itself  is 
approved  by  the  insurance  committee,  which  may  not  be  in  a  position 
to  dispose  of  a  given  case  with  a  full  knowledge  of  all  the  facts  and 
circumstances  involved  or  may  have  such  small  funds  in  hand  that  it 
cannot  give  the  benefit  to  every  deserving  case.  According  to  the 
Consolidated  Report,  however,  broadly  speaking,  "Where  an  insured 
person  applies  to  an  Insurance  Conunittee  for  sanatorium  benefit 
within  three  months  of  removal  into  that  Committee's  area  from  the 
area  of  another  Committee,  and  is  not,  at  the  time  of  removal,  en- 
titled to  treatment  under  a  recommendation  for  sanatorium  benefit 
made  by  the  latter  Committee,  the  funds  of  the  latter  Committee  in 
due  course  suffer  a  deduction  known  as  case-value  debit  and  the  funds 
of  the  former  Committee  in  due  course  receive  a  credit."  Clearly,  the 
questions  involved  are  economic  rather  than  medical  and  are  matters 
of  accountancy  or  of  debit  and  credit  instead  of  first  and  last  the 
interests  of  the  afflicted  person  or  persons,  possibly  imperatively  in 
need  of  being  provided  for  without  delay  with  institutional  or  domi- 
ciliary treatment  under  national  health  insurance,  as  the  case  may  be. 

A  section  of  the  Act  of  1911    provides,  or  rather,  contemplates 

157 


"that  insured  persons  should  be  able  to  have  the  benefit,  when  needed, 
of  skilled  nursing  as  supplementary  to  medical  attendance  and  treat- 
ment." This  provision  or  intention  has  only  to  a  limited  extent  been 
carried  into  effect.  It  is  said  in  the  Consolidated  Report  that  "It  had 
become  clear  that  neither  Committees  nor  Societies  had  at  their  dis- 
posal any  considerable  sum  which  they  could  devote  to  the  provision 
of  nursing,  but  convincing  representations  were  received  from  repre- 
sentatives of  Approved  Societies,  Associations  of  Nurses,  and  doctors 
on  the  panel,  to  the  effect  that  the  provision  of  nursing  was  calculated 
to  hasten  the  return  of  sick  persons  to  health,  and  therefore  to  relieve 
the  funds  of  Approved  Societies."  It  was  therefore  decided  to  make 
a  Grant-in- Aid  of  £100,000,  which,  it  is  explained,  in  the  Con- 
solidated Report,  was  done  "in  view  of  the  close  connection  which 
must  exist  between  any  nursing  which  was  provided  and  the  organized 
medical  service  of  insured  persons."  This  fairly  substantial  sum  was 
plainly  in  the  nature  of  a  gratuity  or  subsidiary  consideration,  not 
directly  paid  for  out  of  the  joint  contributions  of  employers,  employ- 
ees and  the  State,  under  the  National  Health  Insurance  Act.  In 
practice  the  provision  has  been  far  from  adequate,  for  even  previously 
to  the  war,  "the  existing  supply  of  fully  qualified  nurses  fell  far  short  of 
what  would  be  necessary  to  supply  a  complete  and  universal  domi- 
ciliary nursing  service  for  the  insured  population."  In  fact,  it  would 
seem  that  while  the  grant  of  £100,000  was  made  it  was  not  drawn 
from  the  Exchequer,  in  view  of  the  limitations  indicated,  but  whether 
this  action  was  adopted  only  since  the  outbreak  of  the  war  and  in  con- 
sequence thereof  is  not  clearly  stated.  The  inference,  however,  is  fully 
justified  that  the  existing  provision  for  public  health  nursing  in  the 
United  Kingdom  under  national  health  insurance,  and  limited  to  the 
most  deserving  tuberculous  cases,  is  far  less  satisfactory  than  in  the 
United  States,  where  without  compulsory  health  insurance  nursing 
services  have  been  developed  through  public  and  private  assistance  or 
in  consequence  of  philanthropic  co-operation,  etc.,  for  the  benefit  at 
least  of  those  most  urgently  in  need  thereof. 

Under  national  health  insurance  medicines,  subject  to  certain  re- 
strictions, are  included  in  the  medical  treatment.  The  practical  ad- 
ministration of  this  provision  has  resulted  in  an  extremely  complicated 
system  of  accounting  and  numerous  rules  and  regulations  aiming,  in  the 
main,  at  the  reduction  of  the  average  cost  of  the  prescription  by  the 
exclusion  of  the  more  expensive  ingredients.  The  enormous  magni- 
tude of  the  task  of  the  minute  supervision  of  prescriptions  is  best 
brought  out  by  the  official  statement  that  the  number  of  such  pre- 
scriptions issued  annually  under  the  National  Health  Insurance  Acts 

158 


in  England  alone  is  over  25,000,000.  The  insurance  committee  is 
under  contract  with  the  local  druggists  for  the  furnishing  of  medicines 
on  the  basis  of  a  list  of  prices  for  specified  drugs  and  appliances, 
subject  to  periodical  revision.  The  act  itself  provides  for  the  cost  of 
drugs  on  a  purely  arbitrary  basis  of  2s.  per  capita  per  annum  of  the 
insured  population.  Provision  is  made,  however,  for  a  readjustment 
of  differences  in  charges,  but  the  possible  excess  must  not  exceed  6d. 
per  capita  per  annum.  The  drug  tariff  agreed  upon  is  one  subject  to 
interpretation,  for  the  insurance  committee  is  not  bound  to  pay  in 
all  circumstances  the  prices  agreed  upon,  but  it  makes  the  maximum 
prices  subject  to  a  variable  rate  of  discount.  All  of  this,  of  course, 
involves  an  enormous  amount  of  labor  in  matters  of  detail.  By  the  end 
of  1914  the  dissatisfaction  had  become  so  general  that  a  departmental 
committee  of  inquiry  was  appointed  in  February,  1915,  to  consider 
and  report  upon  the  tariff  and  to  draw  up  a  revised  one,  if  necessary. 
The  report  of  this  committee  is  an  illuminating  contribution  to  the 
administrative  literature  of  national  health  insurance.  It  clearly 
emphasizes  the  extreme  complexity  of  Government  supervision, 
direction  and  control  of  a  vast  business  enterprise  for  a  highly 
specialized  purpose  of  sole  concern  to  a  restricted  though  large  pro- 
portion of  the  population.  Recalling  the  fact  that  the  per-capita 
allowance  for  medical  services  is  7s.  and  that  of  this  allowance  2s.  is 
supposed  to  be  set  aside  or  to  be  available  for  the  payment  of  medicines 
and  appliances,  the  calculations  involved  in  the  ultimate  settlement 
of  tens  of  thousands  of  separate  accounts  must  obviously  be  enor- 
mous. All  efforts  to  reconcile  conflicting  claims  have  thus  far  failed  to 
provide  a  satisfactory  solution.  A  series  of  conferences  were  held 
which  revealed  a  general  concurrence  in  the  view  of  the  commission 
that  "the  work  could  be  performed  with  the  maximum  degree  of 
expedition  and  economy  under  joint  or  co-operative  arrangements  in 
lieu  of  separate  arrangements  by  each  committee."  This  was  objected 
to  by  some,  but  agreed  to  by  the  majority.  Groups  having  been 
formed,  local  conferences  were  held  to  decide  as  to  the  expediency  of  a 
joint  pricing  bureau  to  be  established  by  the  particular  group,  the 
form  of  control,  staff,  etc.  Here  again  differences  of  opinion  arose, 
and  to  avoid  a  breakdown,  the  commissioners,  though  reluctantly  in 
view  of  the  pressure  on  their  depleted  staff,  themselves  undertook  the 
establishment  and  management  of  a  bureau  on  behalf  of  the  com- 
mittees concerned,  pending  the  settlement  of  the  differences  which  had 
arisen.  Such  a  settlement  was  finally  reached  when  the  control  of  the 
bureau  was  handed  over  to  a  joint  committee  representative  of  the 
committees  concerned. 

159 


Thus  one  ofilcial  organization  after  another  is  coming  into  existence 
to  perform  functions  wholly  alien  to  the  normal  relation  of  doctor  and 
patient,  and,  broadly  speaking,  ineffective  to  produce  material  ad- 
vantages to  both  parties,  with  a  due  consideration  of  the  inevitable 
expense  involved  in  any  and  all  governmental  efforts  to  control  prices 
by  means  of  minute  regulation. 

As  a  very  brief  illustration  of  the  enormous  complexity  of  the 
control  of  the  drug  tariff,  with  a  due  regard  to  the  determining  of  the 
qualities  of  the  medicines  dispensed,  the  following  statement  is  quoted 
from  the  Consolidated  Report  of  National  Health  Insurance  for  1914- 
1917:  "The  work  of  the  Bureau,"  it  is  stated,  "extends  beyond  the 
Commercial  Tariff  pricing.  It  includes  the  reassessment  of  the  pre- 
scriptions on  the  basis  of  the  1915  Tariff  for  the  purpose  of  ascertain- 
ing the  doctors'  share  of  the  Drug  Fund,  if  any,  and  also  the  supply  of 
statistical  data,  free  of  charge,  to  Panel  Committees,  for  their  use  in 
connection  with  their  investigations  into  the  prescribing  methods  of 
particular  doctors.  The  data  are  supplied  monthly  (or  quarterly,  if 
preferred  by  the  Panel  Committee),  both  in  respect  to  the  last  com- 
pleted month  (or  quarter)  and  also  for  the  whole  period  of  the  calendar 
year  up  to  and  including  that  month  (or  quarter).  The  statistics  in- 
clude: (1)  Total  cost  of  prescriptions  for  the  area.  (2)  Total  num- 
ber of  prescriptions  for  the  area.  (3)  Total  cost  of  prescriptions  for 
each  doctor.     (4)  Total  number  of  prescriptions  for  each   doctor. 

(5)  Average  cost  per  insured  person  on  doctors'  lists  for  whole  area. 

(6)  Average  number  of  prescriptions  per  insured  person  on  lists  for 
whole  area.  (7)  Average  of  cost  per  insured  person  on  each  doctor's 
list.  (8)  Average  number  of  prescriptions  per  insured  person  on  each 
doctor's  list.  (9)  Average  cost  per  prescription  for  whole  area. 
(10)  Average  cost  per  prescription  of  each  doctor's  prescribing." 

The  expenses  of  the  pricing  bureau  are  borne  by  the  insurance 
committees  associated  together  in  its  management,  a  committee's 
share  of  the  total  expenses  being  determined  by  the  ratio  which  the 
number  of  their  own  prescriptions  bears  to  the  aggregate  number  of 
prescriptions  dealt  with  by  the  bureau.  But  the  difficulties  and  per- 
plexities do  not  end  here.  The  cost  prices  of  the  drugs  on  the  tariff  are 
revised  monthly,  in  consultation  with  the  Pharmaceutical  Society,  on 
the  basis  of  the  current  wholesale  prices.  One  artificial  difficulty 
after  another  has  therefore  been  created  in  consequence  of  the  national 
insurance  acts,  not  directly  related  to  either  the  desirability  of  reducing 
the  cost  of  medical  prescriptions  or  of  improving  the  quality  of  the 
medicine  and  appliances  furnished.  An  enormous  amount  of  time 
and  a  very  substantial  amount  of  expense  are  involved  in  the  bureau- 

160 


cratic  administration  of  what,  after  all,  is  primarily  a  matter  of  private 
enterprise,  unless  the  manufacture  and  distribution  of  drugs  are 
assumed  on  the  part  of  the  State  for  precisely  the  same  general  reasons 
as  govern  in  the  assumption  of  the  insurance  function,  which  is  more 
or  less  ill  defined. 

In  contrast  to  the  elaborate  Government  machinery  for  super- 
vision, regulation  and  control,  which  has  come  into  existence  in  con- 
nection with  the  administration  of  the  National  Health  Insurance  Acts, 
very  little  of  real  value  has  been  achieved  in  the  direction  of  a  better 
and  more  effective  national  health  administration.  It  is  somewhat 
difficult  to  separate  this  question  at  the  present  time  from  the  broader 
problem  of  a  proposed  Ministry  of  Health.  The  frequent  assertion 
that  far-reaching  benefits  have  resulted  to  national  health  in  conse- 
quence of  compulsory  health  insurance  or  sickness  insurance  is  quite 
erroneous.  There  is  practically  no  reference  of  real  value  to  public- 
health  questions  in  the  Consolidated  Report  on  National  Health  In- 
surance for  1914-17,  and  apparently  the  entire  subject  is  relegated  to 
the  rear  for  the  time  being,  although  much  is  expected  from  a  Ministry 
of  Health  which  would  include  the  administration  of  all  public-health 
matters  as  well  as  national  health  insurance.*  A  very  important  ex- 
ception, however,  to  this  conclusion  is  the  scientific  work  of  the  Re- 
search Committee  of  the  National  Health  Insurance  Joint  Committee, 
which  has  been  active  in  a  number  of  important  directions,  although 
much  of  the  original  program  was  suspended  on  account  of  the  war. 
Regardless  of  the  discontinuance  of  some  of  the  investigations  in  pro- 
gress previous  to  the  war,  the  scientific  services  rendered  to  the 
Admiralty,  the  War  Office  and  the  Ministry  of  Munitions  must  be 
considered  a  notable  contribution  to  the  cause  of  public  health  in  its 

*On  June25,iy  18,by  anorderincouncila  Ministry  of  Health  was  established  for  HnKland  and  Wales, 
with  the  Rt .  Hon.  Christopher  Addison,  P.  C,  as  First  Minister  of  Health.  The  insurance  cunimi.uions 
heretofore  existing  have  had  their  powers  transferred  to  the  Ministry  of  Health,  which  in  the  future  will 
be  the  supreme  authority  in  all  matters  of  national  health  insurance  in  Great  Britain.  It  has  thus  come 
about  that  insurance  functions,  largely  economic,  have  been  made  subservient  to  the  health 
functions  of  the  State,  largely  medical  and  social,  and  it  is  extremely  significant  that  the  new 
Minister  of  Health,  at  least  for  the  time  being,  will  also  have  charge  of  the  administration  of  the  poor 
law,  which  has  been  transferred  from  the  former  Local  Government  Hoard,  which  has  gone  out  of 
existence  with  the  passing  of  the  Ministry  of  Health  Act.  Of  exceptional  interest  in  this  connection  is  a 
statement  by  Sir  Arthur  Newsholme  in  the  concluding  sentence  of  a  contribution  on  "National  Health" 
to  the  Contemporary  Review,  of  May,  1919.  reading  that  "A  higher  ideal  in  health  matters  can  be 
cultivated;  public  opinion  can  be  trained;  but  the  enactment  of  compulsory  reform  which  docs  not 
carry  with  it  the  public  spirit  of  the  nation  must  always  in  large  measure  fail.  It  Ls  in  non  realization 
of  this  factor  that  social  enthusiasts  not  infrequently  fail.  They  are  impatient  of  delay,  and  are  often 
unwilling  to  undertake  the  necessary  missionary  work  on  voluntary  committees  and  at  the  meetings 
of  local  authorities.  The  present  local  authorities  are  too  numerous,  and  their  unnecessary  multi- 
plicity is  a  serious  obstacle  to  progress.  But  much  more  would  be  done  even  under  existing  conditions  if 
rancorous  and  ill-informed  criticism  were  avoided,  and  if  active  co-operation  with  appreciation  of  what 
is  being  done  replaced  it.  Nothing  has  made  it  so  difficult  to  secure  the  continued  services  of  K'x'd  men 
to  undertake  the  burden  of  local  government  as  the  uncharitable  and  undiscriminating  criticism  aimed 
at  those  engaged  in  it.  Exact  knowledge  of  local  conditions  on  the  part  of  every  citizen  is  needed  to 
ensure  the  needed  co-operation;  and  without  a  high  moral  ideal  on  the  part  of  onlookers  as  well  as  ol 
administrators  the  further  triumphs  of  preventive  medicine,  now  possible,  will  fail  to  be  secured." 

161 


broader  aspects.  Of  the  reports  which  have  been  issued,  perhaps  the 
most  important  is  the  investigation  of  the  incidence  of  phthisis  in  rela- 
tion to  occupations,  limited,  however,  to  the  boot  and  shoe  trade. 
Among  other  investigations  are  reports  on  the  cerebro-spinal  fever 
epidemic  of  1915,  the  occurrence  of  amebic  dysentery  among  troops 
returning  from  the  Eastern  Mediterranean,  a  report  on  the  disordered 
action  of  the  heart  and  a  rather  extended  analysis  of  the  problem  of 
mortality  in  infancy  and  early  childhood.  The  most  elaborate  work, 
however,  is  a  treatise  on  Milk  and  Its  Hygienic  Relations.  Any  one  of 
these  investigations,  of  course,  could  have  been  made,  if  required,  by 
the  medical  officer  of  the  Local  Government  Board,  thoroughly  quali- 
fied, in  charge  of  an  important  department,  and  competent  to 
render  substantial  assistance;  in  other  words,  such  investigations  as 
are  here  referred  to,  however  commendable  and  encouraging,  are 
merely  evidence  of  the  assumption  of  particular  health  functions  by 
a  new  organization  and  not  necessarily  proof  that  such  investigations 
would  not  have  been  made  if  such  an  organization  had  not  existed. 

In  the  United  Kingdom,  as  elsewhere,  it  is  customary  for  public- 
health  officers  to  make  annual  reports.  On  account  of  the  war,  how- 
ever, the  publication  of  such  reports  has  either  been  discontinued  or 
the  contents  of  the  reports  have  been  so  materially  abridged  as  to  pre- 
clude a  full  account  of  what  has  actually  been  done  or  been  achieved 
in  certain  highly  specialized  directions  of  public-health  activity.  A 
review  of  the  reports  for  the  principal  cities  of  the  United  Kingdom 
previous  to  the  outbreak  of  the  w^ar  or  previous  to  the  discontin- 
uance subsequently  of  publication,  but  covering  the  entire  period 
since  the  National  Health  Insurance  Acts  came  into  operation,  fully 
justifies  the  conclusion  that  the  relation  of  national  health  insurance 
to  national-health  progress  is  extremely  superficial  and  of  only  very 
slight  practical  value  to  the  public.  Alost  of  the  references  to  national 
health  insurance  in  its  relation  to  public-health  progress  which  occur 
in  the  local  health  reports  for  representative  cities  and  towns  of  the 
United  Kingdom  have  reference  to  tuberculosis,  which  under  the 
National  Health  Insurance  Acts  is  a  matter  of  separate  consideration. 
There  is  nothing  to  indicate  that,  if  the  Local  Government  Board  had 
been  charged  with  the  duty  of  a  more  effective  and  thoroughly  coordi- 
nated plan  for  the  extension  of  tuberculosis  activities,  the  work 
in  this  field  of  public-health  effort  would  not  have  been  done  in 
as  satisfactory  a  manner,  if  not  more  so,  than  under  national  health 
insurance. 

Section  63  of  the  Act  of  1911  provides  that  "Where  it  is  alleged  by 
the  Insurance  Commissioners  or  by  any  approved  society  or  Insurance 

162 


Committee  that  the  sickness  which  has  taken  place  among  any  insured 
persons,  being  in  the  case  where  the  allegation  is  made  by  a  society 
or  committee,  persons  for  the  administration  of  whose  sickness  and 
disablement  benefits  the  society  or  committee  is  responsible,  is  exces- 
sive, and  that  such  excess  is  due  to  the  conditions  or  nature  of  employ- 
ment of  such  persons,  or  to  bad  housing  or  insanitary  conditions  in 
any  locality,  or  to  an  insufficient  or  contaminated  water  supply,  or  to 
the  neglect  on  the  part  of  any  person  or  authority  to  observe  or  enforce 
the  provisions  of  any  Act  relating  to  the  health  of  workers  in  factories, 
workshops,  mines,  quarries,  or  other  industries,  or  relating  to  public 
health,  or  the  housing  of  the  working  classes,  or  any  regulations  made 
under  any  such  Act,  or  to  observe  or  enforce  any  public  health  pre- 
cautions, the  Commissioners  or  the  society  or  committee  making  such 
allegations  may  send  to  the  person  or  authority  alleged  to  be  in  default 
a  claim  for  the  payment  of  the  amount  of  any  extra  expenditure 
alleged  to  have  been  incurred  by  reason  of  such  cause  as  aforesaid,  and, 
if  the  Commissioners,  society,  or  committee  and  such  person  or  author- 
ity fail  to  arrive  at  any  agreement  on  the  subject,  may  apply  to  the 
Secretary  of  State  or  the  Local  Government  Board,  as  the  case  may 
require,  for  an  inquiry,  and  therefore  the  Secretary  of  State  or  Local 
Government  Board  may  appoint  a  competent  person  to  hold  an 
inquiry." 

This  important  provision  is  apparently  considered  of  very  sec- 
ondary importance,  for  no  extended  references  thereto  appear  in  the 
Consolidated  Report  for  the  period  of  1914-17,  although  the  law  re- 
quires that,  "If,  upon  such  an  inquiry  being  held,  it  is  proved  to  the 
satisfaction  of  the  person  holding  the  inquiry  that  the  amount  of  such 
sickness  has  (1)  during  a  period  of  not  less  than  three  years  before  the 
date  of  the  inquiry;  or  (2)  if  there  has  been  an  outbreak  of  any  epi- 
demic, endemic  or  infectious  disease,  during  any  less  period;  been  in 
excess  of  the  average  expectation  of  sickness  by  more  than  10  per  cent., 
and  that  such  excess  was  in  whole  or  in  part  due  to  any  such  cause 
aforesaid,  the  amount  of  any  extra  expenditure  found  by  the  person 
holding  the  enquiry  to  have  been  incurred  under  this  part  of  the  Act 
by  any  societies  or  committees  where  the  allegation  is  made  by  the 
Insurance  Commissioners,  or,  if  the  allegation  is  made  by  a  society  or 
committee,  by  the  society  or  committee  in  question,  by  reason  of  such 
cause  shall  be  ordered  by  him  to  be  made  good"  in  accordance  with 
the  following  provision,  reading  in  part,* 

♦In  this  connection  the  foUowingquotationfronj  Dr.  W.  A.  Bread's  "Hcullh  und  the  State"  (page* 
255-256)  is  of  particular  interest: 

"Apart  from  the  hopeless  complexity  of  the  macliinery  of  this  Section  there  is  another  condition 
which  practically  nullifies  its  value  for  Public  Health  purposes.     Excess  of  sickness  is  to  be  determined 

163 


Where  such  excess  or  such  part  thereof  as  aforesaid  is  due  to  bad  housing  or 
insanitary  conditions  in  the  locality,  or  to  any  neglect  on  the  part  of  any  local 
authority  to  observe  or  enforce  any  such  Act  or  regulation  or  such  precautions 
as  aforesaid,  it  shall  be  made  good  by  such  local  authority  as  appears  to  the 
person  holding  the  inquiry  to  have  been  ip.  default,  or,  if  due  to  the  insanitary 
condition  of  any  particular  premises,  shall  be  made  good  either  by  such 
authority  or  by  the  owner,  lessee,  or  occupier  of  the  premises  who  is  proved  to 
the  satisfaction  of  the  person  holding  the  inquiry  to  be  responsible. 

The  foregoing  quotations  are  from  the  annual  report  on  the  Sani- 
tary Condition  of  the  Hackney  District  for  the  Year  1912.  They 
were  apparently  included  in  the  report  solely  for  the  purpose  of 
directing  attention  to  the  possibility  that  in  connection  with  an  im- 
pending epidemic  of  smallpox  in  consequence  of  the  neglect  of  vaccina- 
tion the  authorities  might  have  the  power  to  proceed,  under  the 
provisions  of  the  National  Health  Insurance  Acts,  but  it  is  observed  in 
this  connection,  in  the  report  referred  to,  that  "The  average  expecta- 
tion of  sickness  due  to  smallpox  is  practically  nil  where  efficient  vacci- 
nation is  enforced,  therefore  almost  any  outbreak  arising  from  neglect 
of  vaccination  should  engage  the  attention  of  the  Insurance  Commis- 
sioners, with  a  view  to  apportioning  the  extra  expenditure,  due  to 
excessive  sickness,  on  the  defaulting  authorities,  in  accordance  with 
the  above  section." 

Apparently,  however,  no  such  action  as  is  intimated  was  either 
required  or  thought  advisable,  although  in  contrast  to  5,437  births 
reported  only  2,272  vaccination  certifications  were  received  during 
the  year, 

A  rather  interesting  reference  to  tuberculosis  occurs  in  the  annual 
health  report  of  the  city  of  Nottingham  for  1913,  in  part  as  follows: 

The  specially  well-marked  decline  in  the  mortality  from  tuberculosis,  which 
has  undoubtedly  resulted  from  the  crusade  against  it  organized  with  so  much 

by  comparison  with  the  'average  expectation  of  sickness,'  which  is  to  be  calculated  in  accordance  with 
tables  prepared  by  the  Insurance  Commissioners  for  the  purpose  of  valuations.  Presumably  an  average 
expectation  for  each  sex,  and  for  each  year  of  age,  will  be  determined  for  each  of  the  four  kingdoms. 
But  the  object  of  the  Section  is  to  detect  excessive  sickness  due  to  local  causes,  and  for  this  purpose  the 
comparison  should  be  between  the  group  subjected  to  this  special  cause  of  sickness  and  other  persons 
living  under  approximately  the  same  conditions  except  as  regards  the  special  cause.  What  is  really 
required  is  an  average  local  sickness  rate  for  every  district.  The  comparison  with  the  rate  for  the  whole 
country  takes  no  note  of  broad  differences  due  to  climatic  conditions  or  general  character  of  the  en- 
vironment or  occupation.  In  the  agricultural  South  of  England  the  standard  of  comparison  would  be 
too  high;  in  the  industrial  districts  of  the  North  it  would  be  inequitably  low.  In  a  rural  town  or  dis- 
trict of  Sussex  it  might  well  happen  that  a  local  cause  was  appreciably  increasing  the  sickness  rate 
among  a  group  subjected  to  it,  above  the  sickness  rate  of  the  district,  yet  when  the  comparison  is  made 
between  the  sickness  of  the  group  and  the  average  expectation  of  the  whole  country,  no  excess  maj'  be 
apparent,  simply  because  the  general  conditions  of  the  district  are  so  healthy.  On  the  other  hand,  in  a 
crowded  mining  or  industrial  town,  the  general  sickness  rate  may  be  constantly  10  per  cent,  or  more 
above  the  average  expectation  of  the  whole  country,  owing  to  the  aggregate  evils  of  industrialism,  and 
it  would  be  impossible  to  prove  that  an  individual  manufacturer  was  responsible  for  the  excess  in  his 
particular  mill.  As  the  writer  interprets  the  Act,  comparison  cannot  be  made  with  local  sickness  rates 
for  the  purposes  of  this  Section;  but  even  if  it  could  be,  the  extreme  difficulty  of  determining  those  rates 
remains." 

164 


energy  in  recent  years,  and  which  cuhninated  in  the  "Medical"  and  "Sana- 
torium Benefit"  provisions  of  the  National  Health  Insurance  Act,  is  highly 
encouraging,  because  it  shows  that  the  prevalence  of  the  disease  can  be  reduced 
by  appropriate  measures  of  prevention  and  cure  below  the  relatively  low 
point  reached  (in  this  country)  towards  the  end  of  the  nineteenth  century,  and 
which  many  people  were  disposed  to  regard  as  an  almost  irreducible  minimum. 
General  sanitary  improvements  and  rational  education  had  effected  this 
previous  reduction;  it  remained,  and  yet  in  great  measure  still  remains,  to 
reach  the  individual  persons  in  the  classes  now  principally  affected .  and  induce 
them  to  regulate  their  lives  according  to  this  knowledge.  If  this  is  done  the 
disease  will  continue  to  decline,  but  probably  only  to  a  certain  point,  for  so 
long  as  a  "submerged"  social  "tenth"  exists,  tuberculosis  will  almost  cer- 
tainly also  continue  to  exist  as  one  of  the  diseases  by  which  offended  Nature 
eliminates  the  unfit. 


The  final  conclusion  of  the  health  officer  of  Nottingham  is  of 
special  importance  in  connection  with  the  general  question  of  com- 
pulsory health  insurance,  for,  as  intimated,  just  as  long  as  decidedly 
unfavorable  social  and  economic  conditions  known  to  be  predisposing 
causes  of  tuberculosis  continue  to  exist,  so  long  a  further  and  substan- 
tial decline  in  the  death  rate  therefrom  cannot  be  realized.  Dr. 
Philip  Boobbyer,  the  medical  officer  of  health  of  Nottingham,  has  made 
exhaustive  investigations  into  the  relation  of  tuberculosis  to  housing, 
as  determined  by  the  rental  charges,  and  has  established  quite  a  con- 
clusive correlation  of  thoroughly  undesirable  housing  conditions  and 
all  that  is  comprehended  under  that  term  and  an  excessive  incidence 
of  pulmonary  tuberculosis.  He  is  therefore  entirely  justified  in  draw- 
ing the  final  conclusion  that  all  the  facts  "point  simply  to  the  necessity 
for  reform  in  the  conditions  of  life  among  the  poor  and  the  industrially 
employed.  More  fresh  air  and  sunlight,  greater  cleanliness,  better 
feeding,  and  more  sobriety  are  specially  reqtiired  to  counteract  the 
existing  tendency  among  these  sections  of  the  general  community  to 
succumb  to  infection." 

Nothing  is  said  of  national  health  insurance  or  tlie  preventive 
value  of  pecuniary  benefits  even  during  prolonged  illness  or  the  possi- 
bility of  better  medical  attendance  during  illness  from  tuberculosis 
but  the  sole  emphasis  is  placed,  and  properly  so,  upon  the  drastic 
removal  of  the  conditions  known  to  be  directly  responsible  for  the 
excessive  frequency  of  the  disease. 

But  even  under  the  best  conditions,  where  every  effort  is  made  to 
correlate  national  health  insurance  to  tuberculosis  treatment  in 
special  institutions  or  under  improved  domiciliary  conditions,  the 
results  are  still  far  from  satisfactory.  As  said,  for  illustration,  in  this 
connection  by  the  medical  officer  of  health  of  the  Northamptonshire 

165 


County  Council  for  1913,  after  pointing  out  that  the  council  had  re- 
solved that  it  was  prepared  to  enter  into  arrangements  with  the  North- 
amptonshire Insurance  Committee  with  a  view  to  providing 
treatment  in  sanatoria  and  other  institutions  for  insured  persons 
suffering  from  tuberculosis  and  that  it  was  prepared,  also,  subject  to 
the  conclusion  of  a  satisfactory  agreement  with  the  insurance  com- 
mittee, to  undertake  the  institutional  treatment  of  the  dependents 
of  insured  persons  to  whom  sanatorium  benefit  had  been  extended  by 
the  insurance  committee : 

In  view,  however,  of  what  they  considered  to  be  the  inadequate  financial 
assistance  provided  by  the  Exchequer  towards  carrying  out  the  scheme,  of  the 
uncertainty  of  the  number  of  persons  to  be  treated,  and  of  the  amount  of  funds 
available  from  all  sources  for  the  purpose,  the  Council  decided  that  they 
could  not  pledge  themselves  at  present  to  the  carrying  out  of  every  detail  of 
the  scheme  within  any  given  period. 

Again,  in  the  report  for  1914,  the  chief  medical  officer  of  health 
observes  that, 

I  have  to  report  that,  while  the  work  of  the  Chief  Tuberculosis  Officer  has 
been  most  valuable,  the  events  iti  connection  with  the  Sanatorium  Benefits 
under  the  National  Insurance  Act,  1911,  have  fallen  short  unfortunately  of 
what  had  been  anticipated  for  the  year.  In  the  first  place,  it  was  quite  the 
end  of  the  year  before  the  prospect  of  a:n  agreement  could  be  come  to  with  the 
Northamptonshire  Insurance  Committee,  as  to  the  provision  of  treatment  in 
sanatoria  and  other  institutions  for  insured  persons  suffering  from  tuberculosis. 
It  seemed  probable,  however,  by  that  time,  that  an  agreement  might  be 
entered  into  between  the  County  Insurance  Committee  and  the  County 
Council,  whereby  the  latter  should  provide  the  services  of  the  Tuberculosis 
Officer,  together  with  the  necessary  Dispensaries  and  Shelters,  and  thirty  beds 
in  a  sanatorium,  in  consideration  of  the  payment  by  the  former  of  7d.  per  head 
of  the  insured  persons  in  the  County.  This  arrangement  will,  in  any  case, 
not  cover  the  expenses  of  the  scheme  for  the  provision  of  the  Sanatorium 
Benefits  set  on  foot  by  the  County  Council;  but  it  will  have  the  satisfactory 
result  of  concentrating  the  work  of  tuberculosis  prevention  in  the  hands  of  a 
single  public  body.  In  the  second  place,  no  final  decision  has  been  come  to  in 
regard  to  the  provision  of  a  Sanatorium  for  the  County.  It  will  be  remem- 
bered that,  in  my  last  Annual  Report,  I  foretold  the  likelihood  of  a  Pro- 
visional Joint  Committee  being  formed  for  the  purpose  of  establishing  a 
Tuberculosis  Sanatorium  to  meet  the  requirements  of  the  Borough  and 
County  of  Northampton,  while  safeguarding  the  interests  of  the  Trustees  of 
the  existing  Sanatorium  at  Creaton.  Such  a  Committee  was  formed,  the 
consideration  of  sites  and  plans  occupied  the  time  of  many  meetings  of  that 
Committee,  and  there  was  a  good  prospect  of  a  final  decision  being  come  to, 
one  way  or  another,  by  the  Public  Health,  Housing  and  Local  Government 
Committee  of  the  County  Council,  in  respect  of  what  is  known  as  No.  2  site 
at  Hollowell  Grange,  when  negotiations  were  ended  by  the  withdrawal  of  the 

166 


Northampton  Borough  Council  from  further  negotiations.  This  occurred  at 
the  meeting  of  the  Borough  Council  on  the  7th  of  December,  1914,  and  there 
was  no  alternative  left  the  County  Council  but  to  proceed  to  the  formulation 
of  a  Sanatorium  Scheme  independently  of  the  Borough  Council.  This  is  now 
being  done. 

Also,  in  the  report  of  the  same  official  for  1915,  it  is  said  that, 

The  influence  of  the  War  has  been  felt  in  this  County,  also,  in  connection 
with  the  Sanatorium  Benefits  under  the  National  Insurance  Act,  1911,  both 
in  respect  of  delay  in  the  provision  of  sanatorium  accommodation  and  of  some 
measure  of  interruption  in  the  work  of  tuberculosis  control  through  the 
employment  of  Dr.  Muriset  on  Military  Medical  Service.  This  last  condition 
has  been  minimized,  however,  to  the  utmost  by  the  conscientious  work  of  Dr. 
George  Rice,  Consulting  Physician  to  the  Derbyshire  Royal  Infirmary,  who, 
being  over  military  age,  was  elected  temporarily  to  the  post  of  Chief  Tuber- 
culosis Officer  during  the  period  of  the  War.  It  has  been  necessary,  on  the 
other  hand,  to  postpone  the  consideration  of  all  capital  expenditure  for  the  pro- 
vision of  sanatorium  accommodation,  and  to  rely,  as  far  as  may  l)e  practicable, 
on  the  accommodation  already  existing  in  the  country  for  the  treatment  of  cases 
suitable  for  sanatoria.  Moreover  it  was  not  found  possible  during  the  year  to 
complete  the  negotiations,  which  had  been  for  some  length  of  time  in  progress, 
as  to  an  agreement  between  the  County  Council  and  the  Northamptonshire 
Insurance  Committee. 

In  this  connection  it  may  be  said  again  that  the  references  to 
national  health  insurance  in  the  annual  reports  of  local  medical  officers 
are,  as  a  rule,  very  brief,  and,  in  fact,  most  of  the  reports  contain  no 
references  of  practical  value  whatever.  Of  special  interest,  however, 
in  this  connection,  is  a  brief  discussion  of  the  subject  in  the  Annual 
Report  of  the  County  Medical  Officer  of  the  Hampshire  Coimty 
Council  for  the  year  1913,  as  follows: 

In  previous  annual  reports,  I  have  drawn  attention  to  the  vast  amount  of 
unrecognized  and  untreated  sickness  prevalent  among  the  poor.  The  non- 
recognition  of  this  by  those  responsible  for  the  estimates  of  the  Insurance  Act 
resulted  in  the  scheme  drifting  towards  insolvency.  This  unsatisfactory 
actuarial  position  was  due  partly  to  the  fact  that  the  old  friendly  society 
member  was  a  picked  life,  and,  moreover,  was  accustomed,  as  a  rule,  to  claim 
medical  and  sickness  benefit  only  for  serious  illnesses,  but  mainly  to  tljc  ex- 
cessive claims  for  the  married  women  wage-earners.  As  a  result  of  these 
unexpected  claims,  many  of  the  "approved  societies"  are  said  to  be  approach- 
ing insolvency,  and  the  problem  that  at  once  presents  itself  is  what  is  to  be 
done  with  their  members.  One  possibility  is  to  add  them  to  the  existing 
deposit  contributors  to  form  a  county  society  under  county  control. 

With  reference  to  maternity  benefit,  it  is  said  that 

Another  subject  that  should  be  transferred  to  county  or  county  borough 
councils  is  the  administration  of  maternity  benefit  and  the  treatment  of  all 

167 


disorders  connected  with  pregnancy  and  birth.  Properly  administered,  this 
l)enefit,  accompanied  by  the  provision  of  all  necessary  treatment,  should 
result  in  a  great  diminution  in  infant  mortality,  and  should  therefore  take  its 
proper  place  among  measures  that  directly  affect  the  public  health. 

Investigations  into  the  results  of  the  Maternity  Benefit  have  apparently 
estaljlished  the  following  facts: 

(1)  The  hygienic  improvement  effected  by  the  unsupervised  and  uncon- 
ditional money  payments  is  problematical. 

(2)  The  additional  provision  actually  made  for  the  needs  of  the  mother  and 
infant  amounts,  on  the  whole,  to  comparatively  little. 

(3)  Hardly  any  medical  or  midwifery  assistance  is  being  given  over  and 
above  what  was  previously  obtained. 

Any  grant  out  of  public  money  for  pregnancy  and  maternity  ought  to  be 
linked  up  with  the  existing  public  health  work,  if  it  is  to  be  eflfectual  as  a  real 
health  benefit,  and  if  it  is  to  make  adequate  provision  for  the  expectant 
mother,  for  child-birth,  and  for  infancy.  It  is  not  likely  that  any  satis- 
factory solution  of  the  present  administrative  difficulties  will  be  found  until 
all  liability  for  maternity  and  pregnancy  is  removed  from  the  Insurance  Fund. 
Complete  responsibility,  both  ante-natal  and  post-natal,  should  be  placed 
upon  the  County  Council  for  all  cases,  whether  insured  or  uninsured,  and  the 
administration  of  these  matters  should  be  linked  up  with  the  present  Public 
Health  Department  of  the  County  Council,  who  would  then  be  enabled  to 
proceed  effectively  with  such  schemes  as  schools  for  mothers,  and  the  general 
supervision  of  pregnancy  and  motherhood.  .  .  .  There  is  no  reason  why 
pregnancy  should  not  follow  the  lines  of  the  present  Sanatorium  benefit,  the 
County  Councils  being  given  powers  to  extend  such  benefits  to  non-insured 
persons  in  just  the  same  way  as  they  may  extend  the  Sanatorium  benefit. 
The  right  to  a  money  payment  could  be  reserved  for  insured  persons,  but  all 
necessary  provision  for  the  confinement,  institutional  or  domiciliary,  should 
be  available  for  every  woman.  It  is  only  by  some  such  scheme  that  it  will  be 
possible  to  avoid  the  disastrous  injustice  of  leaving  a  million  and  a  half  women 
totally  unprovided  for  as  regards  their  confinements. 

The  foregoing  observations  are  so  much  more  valuable  in  view  of 
the  apparent  indications  that  much  had  been  expected  from  the 
National  Health  Insurance  Act  on  the  part  of  the  medical  officer 
of  the  Hampshire  County  Council,  as  is  clearly  emphasized  by  a 
reference  to  the  subject  in  his  annual  report  in  the  year  1912,  when, 
of  course,  the  opportunity  for  a  thorough  test  had  not  yet  arrived: 

The  claims  for  this  Act  to  be  regarded  as  a  public  health  measure  are  irre- 
sistible, but  the  machinery  set  up  by  the  Act  prevents  as  far  as  is  possible  the 
development  of  the  public  health  side  of  the  scheme.  The  Hampshire  County 
Council  joined  with  others  in  pointing  out  that  the  natural  authority  for  the 
administration  of  the  Act  was  the  County  Council,  but  in  spite  of  these  repre- 
sentations a  new  public  body  was  created,  which  added  to  the  already  too 
great  number  of  authorities  dealing  to  a  greater  or  less  extent  with  medical 
benefits  for  the  public.     It  now  appears  possible  that  in  the  near  future  the 

168 


work  will  be  united  with  that  of  the  Health  Committees  of  county  and  county 
borough  councils.  In  practice  the  actual  work  of  administration  is  not  great, 
and  in  the  hands  of  an  experienced  officer  it  would  easily  be  condensed  suf- 
ficiently for  it  to  be  dealt  with  by  a  county  council  committee.  The  obvious 
energy,  ability,  and  enthusiasm  of  the  present  Insurance  Committee  could  be 
retained  by  a  system  of  co-operation. 

One  of  the  principal  claims  of  the  Insurance  Act  to  be  considered  a  public 
health  measure  is  the  existence  of  section  63,  which  enables  an  insurance  com- 
mittee, or  an  approved  society,  or  the  Commissioners,  to  claim  from  certain 
persons  or  local  authorities  the  cost  of  excessive  sickness  which  may  be  proved 
to  be  due  to  the  default  of  such  persons  or  authorities.  The  object  of  this 
section  is  excellent,  but  it  is  doubtful  whether  the  machinery  provided  for  its 
application  will  enable  it  to  be  carried  out  in  its  entirety.  In  any  case,  how- 
ever, the  existence  of  such  a  section  can  only  do  good,  and  it  is  hoped  that 
insurance  committees  and  friendly  societies  will  lose  no  time  in  bringing  before 
individuals  and  sanitary  authorities  matters  which,  in  their  opinion,  are 
adversely  affecting  the  health  of  the  public. 

The  evidence  is  more  negative  than  positive  that,  broadly  speak- 
ing, British  pubHc-health  administration  has  not  been  efTectively 
coordinated  to  national  health  insurance  in  behalf  of  the  required 
effort  to  materially  reduce  the  prevalence  of  imnecessary  sickness  of 
a  serious  nature  and  to  bring  about  a  further  reduction  in  the  mortality 
from  strictly  preventable  diseases.  It  is  of  importance  in  this  connec- 
tion to  consider  the  following  quotation  from  the  official  report  of  the 
Memorandum  of  the  Panel  Committee  for  the  County  of  London, 
under  date  of  June,  1917,  with  special  reference  to  the  subject  of  the 
prevention  of  disease: 

It  is  sometimes  urged  as  an  argument  against  the  present  medical  arrange- 
ments that  the  panel  practitioner  is  not  encouraged  to  take  an  active  part  in 
the  prevention  of  disease.  It  may  be  pointed  out  that  by  the  system  of  pay- 
ment by  capitation  fee  now  almost  universally  adopted  under  the  insurance 
Act,  the  pecuniary  interests  of  the  practitioner  arc  entirely  enlisted  on  the 
side  of  keeping  the  insured  persons  on  his  list  in  a  state  of  good  health.  At 
the  same  time  the  Panel  Committee  for  London  is  of  the  opinion  that  the  two 
great  functions  of  medicine,  the  preservation  of  the  public  health  and  the 
treatment  of  individual  persons  by  methods  cither  curative  or  preventive, 
must,  if  they  arc  to  be  efficient,  be  carried  on  by  different  services  of  medical 
men  under  separate  administrations.  Such  separation  should  l)c  combined 
with  the  closest  coordination  between  the  de|iartments  and  services  con- 
cerned, by  which  the  knowledge  and  experience  of  general  practitioners  of 
social  and  hygienic  conditions  might  be  better  utilized. 

In  the  opinion  of  the  Committee  it  is  essential  in  order  to  secure  such  co- 
ordination that  a  Ministry  of  Health  should  be  established  to  control  all  forms 
of  public  medical  service  in  the  Kingdom.  In  such  an  ordered  control  of 
medical  work  it  would  lie  possible  to  secure  for  the  clinician  the  important  and 
responsible  position  wliich  he  ought  to  occupy. 

169 


The  Panel  Committee  is  also  of  the  opinion  that  progress  in  the  direction  of 
prevention  of  disease  would  be  effected  by  greater  efforts  being  made  to  secure 
that  ail  insured  persons  on  becoming  entitled  to  medical  benefit  should  at  once 
I)lacc  themselves  on  the  list  of  a  panel  practitioner.  The  interview  which  would 
in  normal  conditions  take  place  between  the  doctor  and  the  presumably 
healthy  insured  person,  especially  if  it  were  accompanied  by  a  medical  ex- 
amination, would  often  enable  advice  to  be  given  which  might  tend  to  prevent 
the  later  development  of  disease.  The  punctual  inclusion  of  all  insured 
persons  on  doctors'  lists  would  best  be  secured  by  the  imposition  of  a  suitable 
penalty  for  undue  delay.  This  would  also  tend  to  remove  difficulties  which, 
not  unnaturally,  arise  when  an  insured  person  not  on  any  list,  seriously  ill  and 
in  need  of  treatment,  applies  to  be  accepted  by  a  panel  practitioner. 

These  semi-official  observations  and  conclusions  are  in  strict  con- 
formity to  the  facts.  There  is  no  evidence  available  to  prove  that 
national  health  insurance,  during  the  eight  years  since  the  law  went  into 
effect,  has  had  a  decided  influence  for  good  upon  the  progress  of  public 
health  throughout  the  United  Kingdom.  The  annual  reports  of  the 
Local  Government  Boards  of  England,  Scotland  and  Ireland  are  practi- 
cally silent  on  the  subject.  The  same  conclusion  applies  to  the  annual 
reports  of  the  Registrar-Generals  of  England,  Scotland  and  Ireland. 
The  most  recent  Parliamentary  publication  on  "Industrial  Health 
and  Efficiency"  of  the  Health  of  Munition  Workers  Committee  of  the 
Ministry  of  Munitions  also  fails  to  draw  attention  to  national  health 
insurance  as  a  method  or  a  means  whereby  any  one  of  a  multitude  of 
social  and  economic  problems  more  or  less  directly  related  to  health 
and  mortality  can  be  brought  nearer  to  a  successful  solution.  This 
report  represents  what  is  probably  the  most  carefully  considered  in- 
quiry ever  made  into  the  question  of  industrial  health  and  its  relation 
to  industrial  efficiency.  If  compulsory  health  insurance  is  such  a 
panacea  as  is  alleged  by  those  who  are  conducting  the  propaganda  in 
this  country,  it  is  little  short  of  a  paradox  that  the  foremost  health 
authorities  of  the  United  Kingdom  in  connection  with  a  question  of 
the  most  profound  national  concern  should  not  rely  more  upon  it 
as  a  means  in  the  furtherance  of  their  plans. 

The  final  report  of  the  Health  of  Munition  Workers  Committee, 
after  a  brief  preliminary  and  historical  survey,  considers  in  detail  such 
questions  as  the  relation  of  fatigue  and  ill-health  to  industrial  efficiency, 
industrial  employment  of  women,  hours  of  labor,  shifts,  breaks,  spells, 
pauses  and  holidays,  Sunday  labor  and  nightwork,  lost  time,  food 
and  canteens,  etc.  Following  this  extended  discussion  is  a  section  on 
Sickness  and  Ill-health,  in  which  it  is  said  that 

Sickness  due  directly  or  indirectly  to  the  industrial  occupation  takes  various 
forms  and  degrees,  from  the  passing  headache  to  serious  organic  disease  of 

170 


fatal  issue.  The  lungs,  the  heart,  the  digestive  organs,  the  nervous  system, 
the  muscular  system — each  or  all  may  be  affected  with  results  harmful  both 
to  industrial  efficiency  and  output,  and  also  to  personal  health  and  expecta- 
tion of  life.  Moreover  it  must  be  remembered  that  an  undue  proportion  of 
sickness  in  any  group  of  workers  usually  represents  among  those  not  actually 
sick  lessened  vigor  and  activity  which  cannot  fail  to  reduce  output.  Dis- 
abling conditions  or  influences  which  injure  some  have  a  tendency  to  mark  all. 
Employers  and  their  work-people  should  therefore  have  a  general  appreciation 
of  these  injurious  conditions  if  they  are  to  be  on  the  outlook  to  guard  against 
or  mitigate  their  evil  effect. 

In  view  of  the  foregoing  the  committee  suggests  that,  speaking 
generally,  attention  should  be  given  to  (1)  excessively  long  hours  of 
work,  particularly  by  night,  (2)  cramped  and  constrained  attitudes 
or  postures  during  work,  which  prevent  the  healthy  action  of  the  lungs 
and  heart,  (3)  prolonged  and  excessive  muscular  strain,  (4)  machinery 
accidents,  (5)  working  in  unventilated  or  insufficiently  ventilated 
shops,  (6)  air  conditions,  including  humidity,  (7)  imperfect  lighting 
and  its  relation  to  eye-strain,  headache,  etc.,  (8)  working  with  or  in 
the  presence  of  gases,  vapors,  poisons  or  other  irritating  substances, 
(9)  industrial  dust  and  its  relation  to  lung-diseases.  All  of  these 
factors  or  conditions,  bearing  more  or  less  directly  upon  health  and 
physical  efficiency,  are  subject  to  control  under  proper  state  super- 
vision, inspection,  etc.;  but  all  of  these  conditions  are  most  likely  to 
continue  unabated  if  an  inducement  is  held  out  to  workmen  and  work- 
women to  draw  sick-pay  for  more  or  less  prolonged  periods  of  time, 
possibly  even  in  excess  of  normal  earnings  when  supplemented  by  sick- 
benefit  from  lodges,  fraternal  societies,  etc.  Being  primarily  inter- 
ested in  the  improvement  of  the  health  and  physique  of  wage-earners, 
the  committee  completely  ignores  national  health  insurance  and  sug- 
gests remedial  measures,  broadly  speaking,  in  conformity  to  generally 
accepted  principles  of  public  and  industrial  hygiene;  in  fact,  the  com- 
mittee say  in  their  report  that 

Though  tliese  are  a  sufficiently  formidable  list  of  disabling  conditions,  or 
conditions  which  without  proper  care  and  precaution  may  readily  cause 
disablement,  they  do  not  complete  the  inventory.  At  least  as  important  as 
any  of  these  occupational  influences,  but  inseparable  from  them,  is  the  predis- 
position to  disease  arising  from  the  absence  of  personal  hygiene.  The  neces- 
sities of  individual  health  are  few  and  simple,  but  they  arc  essential.  Suitable 
and  sufficient  food,  fresh  air,  warmth,  moderation,  cleanliness  in  ways  and 
habits  of  life,  the  proper  inter-relation  of  work,  repose  and  recreation  of  mind 
and  body  are  laws  of  hygiene,  the  elements  of  vital  importance  for  which 
facilities  must  be  provided  if  the  maximum  industrial  output  of  the  individual 
is  to  be  secured  and  maintained.  These  matters  need  consideration  by  the 
management  just  as  much  as  the  healthy  supervision  of  the  external  circum- 
stances of  the  factory  and  its  technical  processes. 

171 


These  extracts  are  sufficient  for  the  purpose  of  sustaining  the  im- 
portant conclusion  that  a  departmental  committee,  presided  over  by 
Sir  George  Newman,  the  Chief  Medical  Officer  of  the  Board  of  Educa- 
tion, and  including  such  authorities  as  Sir  Thomas  Barlow,  late  Presi- 
dent of  the  Royal  College  of  Physicians,  Gerald  Bellhouse,  Esquire, 
Deputy  Chief  Inspector  of  Factories,  Prof.  A.  E.  Boycott,  Director, 
Pathological  Department,  University  College,  London,  Dr.  E.  L.  Col- 
lis.  Director  of  Health  and  Welfare,  Ministry  of  Munitions,  Dr.  Leon- 
ard E.  Hill,  Director,  Department  of  Applied  Physiology  and  Hygiene 
of  the  Medical  Research  Committee,  and  others,  did  not  with  all  the 
evidence  before  it,  consider  compulsory  health  insurance  a  method  or 
a  means  of  rendering  substantial  aid  in  the  furtherance  of  the  effort 
to  raise  the  level  of  health  of  munition-workers  individually  or  col- 
lectively and  as  a  consequence  thereof  their  physical  efficiency  as  a 
prerequisite  to  an  increase  in  output.  The  committee  took  into  full 
account  the  indications  of  sickness  as  measured,  in  addition  to  the 
clinical  signs  and  symptoms,  by  the  statistical  evidence.  No  evidence 
derived  from  the  experience  under  national  health  insurance  is  referred 
to;  in  fact,  no  such  evidence  of  this  kind  has  after  eight  years  been 
made  available.  The  claim  frequently  brought  forward  that  compul- 
sory health  insurance  would  provide  a  vast  amount  of  new  knowledge 
has  neither  been  met  in  Germany  nor  in  England.  Even  the  experience 
of  the  Leipzig  Communal  Sick  Fund,  which  is  the  only  precise  infor- 
mation ever  made  available  in  Germany  as  regards  the  relation  of  the 
occupation  of  the  insured  person  to  health,  is  decidedly  inconclusive 
upon  practically  all  the  important  questions  involved  in  factory 
hygiene  and  industrial  disease  and  industrial  accident  prevention ;  but 
as  regards  England,  no  such  information  whatever  has  been  forth- 
coming. The  Committee  of  the  Ministry  of  Munitions  properly 
suggests  that  every  case  of  lost  time  or  absence  from  work 
should  be  recorded  and  properly  investigated.  It  does  not  require 
compulsory  health  insurance  to  perfect  existing  methods  of  record- 
keeping in  industrial  plants  both  large  and  small  and  both  under  pri- 
vate and  under  government  control.  It  would  not  be  at  all  difficult  to 
have  every  plant  keep  a  simple  sickness-register,  or  a  record  of  absence 
from  work,  stating  the  reasons  for  such  absences  and  perhaps  requiring 
a  medical  certificate  in  the  event  of  absence  prolonged  over  a  given 
period  of  time.  Certainly  in  government  establishments  such  records 
could  be  secured  without  serious  difficulty;  in  fact,  for  many  large 
establishments  they  are  available  at  the  present  time.  In  addition 
thereto  a  thoroughly  qualified  analysis  of  death  certificates,  according 
to  occupation,  race,  locality,  etc.,  would  disclose  much  useful  informa- 

172 


tion  in  the  furtherance  of  a  well-considered  program  of  health  and  in- 
dustrial reform.  As  pointed  out  by  the  Committee  of  the  Ministry 
of  Munitions: 

At  the  foundation  of  any  sound  system  of  dealing  with  industrial  diseases 
lie  two  elementary  principles:  First,  that  prevention  is  better  than  cure;  and 
secondly,  that  for  treatment  to  be  imposed  effectively  it  must  deal  with  the 
beginnings  of  disease.  Bearing  these  in  mind,  the  preliminary  safeguard 
should  be  to  provide  for  the  medical  examination  of  all  workers  in  order  to 
secure  as  far  as  may  be  their  physical  fitness  for  employment.  In  some  muni- 
tion works,  and  especially  in  those  where  dangerous  substances  are  manipu- 
lated, a  preliminary  medical  examination  of  all  workers  is  usual.  Dental 
treatment  is  also  sometimes  provided.  Such  examinations  are  specially  im- 
portant at  the  present  time  owing  to  the  strain  involved  by  the  conditions  of 
employment  and  owing  to  the  large  number  of  persons  who  are  taking  up 
industrial  employment  for  the  first  time;  but  such  examinations  are  always 
likely  to  be  desirable  where  the  work  involves  any  special  strain,  and  particu- 
larly so  in  the  case  of  women.  Apart  from  their  value  in  detecting  early  signs 
of  ailment  or  defect,  medical  examinations  are  valualile  as  affording  convenient 
opportunity  for  the  inculcation  of  sound  doctrines  as  to  personal  hygiene 
cleanliness  and  healthy  habits.  Periodic  re-examination  is  practically  con- 
fined to  certain  dangerous  trades  and  processes,  the  workers  in  which  have  to 
be  periodically  examined  under  the  Regulations  of  the  Home  Office  or  the 
Ministry  of  Munitions.  Where  they  can  be  arranged  for,  such  examinations 
might  usefully  be  extended  to  workers  engaged  in  other  processes  involving 
special  strain  or  risk. 


It  is  a  perfectly  rational  assumption  that  if  national  health  insur- 
ance in  the  opinion  of  the  committee  offered  a  solution  of  the  real  prob- 
lem of  sickness  in  industry,  some  reference  would  have  been  made 
thereto  in  what,  as  has  previously  been  said,  is  really  an  epoch- 
making  document  in  the  history  of  the  British  labor  movement. 

The  committee  properly  emphasizes  the  necessity  for  physical 
examinations  and  reexaminations.  As  a  second  step,  it  recommends 
a  reduction  to  the  minimum  of  "Any  unfavorable  conditions  obtain- 
ing in  the  factory,  by  providing  proper  sanitary  conditions  and 
accommodation,  safeguarding  machinery,  controlling  hours  of  labour, 
furnishing  canteen  facilities,  and  securing  sufficiently  warmed, 
lighted  and  ventilated  workrooms."  Thirdly,  it  is  emphatic  in 
recommending  arrangements  for  adequate  medical  and  nursing 
schemes.  The  recommendation  itself  is  evidence  that  no  such 
schemes  have  effectively  been  established  imder  national  health 
insurance,  and  it  is  a  fair  assumption  that  they  would  have  first 
been  brought  into  existence  in  behalf  of  a  class  of  workers  employed 
in  connection    with    national    industries   indispensable    to   the   most 

173 


efficient  conduct  of  the  war.  The  committee  says  in  this  connection 
that  "Medical  attendance  is  obtainable  under  the  National  Insur- 
ance system,  or  may,  be  made  available  by  the  special  provision  of  a 
medical  and  hospital  service  for  the  factory.  But  nursing  can  only  be 
obtained  by  the  employment  of  one  or  more  trained  nurses  to  under- 
take duties  in  the  factory  by  night  as  well  as  by  day.  Such  arrange- 
ments have  been  instituted  in  many  munition  factories,  especially 
where  women  are  employed,  and  they  have  proved  of  great  value  to 
both  employers  and  employees." 

National  health  insurance,  obviously,  is  considered  quite  inade- 
quate by  the  committee,  but  no  opinion  is  expressed  as  to  the 
directions  in  which  the  system  could  or  should  be  improved.  The 
committee  rather  relies  upon  voluntary  effort  and  a  more  intelligent 
conception  of  managerial  responsibility.  It  points  out  that  it  is  glad 
"to  recognize  the  increasing  frequency  with  which  nurses  are  now 
being  emplo3^ed  in  factories,"  but  it  observes,  also,  that  "the  employ- 
ment of  doctors  is  less  common."  Whatever  is  required  in  this  direc- 
tion is,  of  course,  feasible  without  national  health  insurance ;  in  fact,  is 
more  likely  to  be  efficient  in  proportion  as  no  inducement  is  offered 
to  malingering  or  feigned  sickness.  The  recommendations  of  the 
committee  all  have  reference  to  established  methods  and  means 
which  have  been  successful  in  the  past  whenever  properly  applied. 
They  include  an  extended  consideration  of  the  whole  problem  of  in- 
juries and  accidents,  of  special  industrial  diseases,  of  cleanliness,venti- 
lation,  heating  and  lighting,  of  sanitation,  washing  and  cloak-room 
facilities,  of  seats,  weights,  clothing  and  drinking-water,  of  w^elfare 
supervision  for  women  and  girls  and  for  boys  and  men  and  of  welfare- 
work  outside  of  the  factory. 

The  report  is  a  model  of  concise  enumeration,  and  the  conclusions 
are  in  strict  conformity  to  the  facts  and  every-day  experience.  The 
recommendations  rest  upon  the  fundamental  principle,  as  stated  by  the 
committee,  that  "One  of  the  vital  and  pressing  problems  before  the 
country  at  the  present  moment  and  in  the  immediate  future  is  the 
question  of  the  health  and  contentment,  the  capacity,  status  and  ef- 
ficiency of  industrial  workers,  whose  contribution  to  the  Commonwealth 
is  of  ever-growing  importance."  All  that  the  committee  suggests  by 
way  of  reform  is  as  readily  obtainable  without  compulsory  health  in- 
surance as  with  it.  In  the  main  the  recommendations  of  the  committee 
concern  the  hours  of  labor,  the  relation  of -fatigue  to  industrial  ef- 
ficiency, the  rational  employment  of  women,  the  proper  distribution  of 
hours  of  employment  with  necessary  breaks,  spells,  pauses  and  holidays, 
the  statutory  control  of  Sunday  labor  and  nightwork,  and  the  reduc- 

174 


tion  of  the  latter  to  a  minimum,  the  accounting  for  lost  time,  it  being 
observed  that  "the  proportion  of  time  lost  through  sickness  is  generally 
greatly  underestimated,"  and  that  the  suggestion  that  the  causes 
thereof  should  be  very  carefully  ascertained  and  that  the  remedies  re- 
quired should  be  sought,  though,  in  the  opinion  of  the  committee, 
"Wages  are  probably  the  most  important  incentive."  Finally,  there 
is  the  question  of  food  and  canteens  and  of  the  prevention  of  special 
industrial  diseases,  etc.  Under  the  general  question  of  sickness  and  ill- 
health  the  committee  observes  that  any  undue  proportion  of  sickness 
in  any  group  usually  represents  amongst  those  not  actually  sick  lessened 
vigor  and  activity,  which  cannot  fail  to  reduce  output. 

The  very  brief  reference  in  the  report  to  national  insurance  is 
extremely  suggestive.  National  insurance  is  not  referred  to  as  a  prom- 
ising means  whereby  essential  reforms  could  be  achieved,  or,  in  other 
words,  whereby  the  national  health  of  men  and  women  workers 
employed  in  w^ar  industries  could  be  raised  to  a  higher  level  as  a  pre- 
requisite to  a  higher  degree  of  industrial  efficiency.  Quite  to  the  con- 
trary, it  must  be  self-evident  that  any  pecuniary  inducement  to  the 
prolongation  of  sickness  must  tend,  in  the  long  run,  to  increase  un- 
necessary absences  from  work  and  to  delay,  if  not  prevent,  the  measures 
required  to  eliminate  the  causes  responsible  for  whatever  sickness 
may  occur.  The  interest  in  preventive  measures  will  be  in  exact  pro- 
portion as  the  consequences  of  neglect  and  indiflerence  arc  felt  by  those 
directly  concerned.  This  conclusion  is  as  true  of  public  hygiene  as 
of  private  or  personal  hygiene.  In  no  country  where  social  insurance 
has  been  established  has  the  Government  courageously  faced  the  ques- 
tion of  overinsurance.*  Unless  all  private  sickness  insurance  is  abso- 
lutely prohibited,  the  tendency  toward  malingering  must  be  increased 
by  whatever  compulsory  system  is  adopted,  for  under  whatever  system 
of  private  insurance  may  prevail  the  cost  of  overinsurance  is  practi- 
cally prohibitive.  When  compulsory  insurance  is  obtained  at  perhaps 
one-third  or  two-fifths  of  its  cost  there  is  naturally,  however,  a  strong 
inducement  to  secure  additional  private  insurance,  so  as  to  provide 
for  the  payment  of  full  wages,  and  even  more,  during  prolonged  periods 
of  illness,  more  or  less  assumed  or  pretended  or  shammed,  as  the  case 
may  be.     In  England  the  rule  that  sick-benefits  are  payable  only  from 

♦It  has  been  said  with  reference  to  the  question  of  overinsiiruiice  "that  in  cases  of  genuine  illness  a 
larger  income  may  be  necessary  than  in  times  of  health  [but  this)  even  if  granteiJ  as  valid,  does  not  meet 
the  difficulty  tfiat  during  periods  which  could  not  be  reRarded  as  times  of  Kenuinc  illncvs,  the  jKissi 
biUty  of  drawing  more  wlicn  idle  than  when  at  work  mi^ht  furnish  an  inducement  to  declare  oo  the 
funds  unnecessarily,  when  no  case  could  be  advanced  for  the  necessity  or  desirability  of  more  money 
being  available  for  the  household.  If  it  is  granted  that  any  excess  furnished  usually  a  certain  tempta- 
tion, it  may  be  argued  that  it  is  expedient  that  the  maximum  sum  insurable  should  be  somewhat  less 
than  the  ordinary  earnings  of  the  insured  person."  (Report  of  Committee  on  .Sickness  Hcnefit  Claimt 
under  National  Insurance  Act.     Sir  Gerald  Ryan,  Chairman,  i>age  1.^.^ 

175 


the  fourth  day  of  ilhicss  has  also  led  to  very  serious  consequences. 
Every  authority  on  malingering  sustains  the  conclusion  advanced  by 
Jones  and  Llewellyn,  in  their  treatise  on  "Malingering,"  that  "Under 
the  rule  that  sickness-benefit  is  only  payable  from  the  fourth  day  of 
illness  we  find  presented  a  strong  temptation  to  the  weak  and  un- 
scrupulous to  exaggerate  the  severity  or  prolong  the  duration  of  slight 
ailments."  They  observe  further  that  "Before  the  installation  of 
insurance  men  and  women  held  in  disregard  such  trivial  maladies; 
but  latterly  they  have  tended  to  magnify  all  such,  though  not  always 
with  fraudulent  intent." 

The  subject  of  malingering  is  a  problem  by  itself.  It  defies  analysis 
and  brief  presentation,  most  of  all  in  non-technical  terms.  A  large 
portion  of  malingering  cannot  be  detected  or  disclosed  by  the  most 
thorough  examination  or  by  the  most  expert  skill.  It  is  rather  a  ques- 
tion of  character,  or,  as  said  by  Jones  and  Llewellyn,  "a  faulty  attitude 
of  the  individual  towards  the  State."  The  questions  involved  are 
perhaps  the  most  profound  and  far-reaching  that  concern  labor  and 
life  in  its  modern  aspects  as  the  background  to  individual  and  collec- 
tive responsibility  of  citizenship.  By  over-emphasizing  the  State 
as  a  functionary  the  sense  of  personal  responsibility  is  reduced  to  a 
minimum,  or,  in  the  words  of  Jones  and  Llewellyn,  the  essential  con- 
sequence of  the  change  under  national  insurance  has  been  "a  lessening 
of  the  grip  of  men  on  the  principles  of  justice  and  equity."  The  mere 
complexity  of  any  and  every  system  of  social  insurance  tends  to  con- 
fuse the  mind  and  preclude  a  rational  conception  of  duties  and  re- 
sponsibilities. The  sole  emphasis  is  placed  upon  rights  and  benefits, 
usually  enormously  exaggerated  in  the  case  of  the  sick  and  injured, 
who,  receiving  more  than  they  have  paid  for,  still  complain  of  insuf- 
ficiency and  inadequacy,  because  of  exaggerated  notions  fostered  by 
professional  reformers  or  radical  agitators,  continuously  insisting  upon 
the  alleged  injustice  on  the  part  of  the  employer  or  the  State  towards 
the  wage-earner,  especially  those  engaged  in  low-paid  occupations. 

It  would  have  been  the  better  part  of  wisdom  if  the  National 
Health  Insurance  Act  of  England  had  been  framed  by  statesmen  rather 
than  by  politicians,  if  it  had  been  made  to  represent  a  clearly  stated 
principle  of  justice  rather  than  a  vague  notion  of  necessity  and 
expediency.  The  word  "insurance"  was  used  and  is  used  as  a  delusion 
and  a  snare.  A  thoroughly  well-established  social  institution  of 
enormous  benefit  to  mankind  has  its  very  terminology  perverted  to 
improper  use  and  wrongful  methods  of  deception  almost  without  a 
word  of  protest  from  those  most  seriously  concerned.  For  no  matter 
from  what  viewpoint  the  question  is  considered,  national  health  insur- 

176 


ance  is  not  insurance  in  the  true  sense  of  the  term;  nor  is  it,  for  that 
matter,  strictly  speaking,  a  health  measure,  since,  as  is  clearly  shown 
by  the  evidence,  the  system  does  not  tend  to  promote  health,  but 
rather  the  reverse. 

The  most  formidable  indictment  of  the  British  system  of  com- 
pulsory health  insurance  is  presented  in  a  treatise  on  "Health  and  the 
State,"  by  William  A.  Brend,  M.  D.,  lecturer  on  forensic  medicine, 
Charing  Cross  Hospital,  London.  The  work  is  practically  a  plea  for  a 
thoroughly  well-considered  plan  of  national  health  organization  under 
a  Ministry  of  Health,  having  primarily  for  its  purpose  the  ascertain- 
ment of  conditions  predisposing  to  sickness  and  premature  death  and 
possible  measures  and  means  for  prevention  and  control.  The  treatise 
includes  extended  observations  on  the  subject  of  medical  treatment  of 
wage-earners  and  their  dependents  (emphasizing  the  growth  and 
importance  of  institutional  treatment),  the  present  insufficiency  of 
institutional  treatment,  the  medical  treatment  by  the  general  prac- 
titioner, the  size  of  working-class  practice  and  the  menace  of  lightning 
diagnosis,  the  absence  of  expert  assistance,  the  lack  of  laboratories  for 
expert  diagnosis,  the  futility  of  treatment  in  a  bad  environment,  the 
discontent  with  the  panel  system,  etc. 

The  writer  considers  critically  the  working  of  the  National  Health 
Insurance  Act,  with  particular  reference  to  public  health.  He  directs 
attention  to  the  fact,  which  is  in  strict  conformity  to  the  truth,  that 
"Health  legislation  in  Parliament  has  always  suffered  from  the  almost 
complete  absence  of  scientific  medical  criticism  and  the  Insurance  Act 
was  no  exception  to  this  rule.  It  is  equally  true  that  in  its  genesis,  in 
its  modification  in  the  House  of  Commons  and  very  largely  in  its  sub- 
sequent administration,  it  has  been  the  work  of  amateurs,  and  it  con- 
tains in  consequence  the  most  glaring  blunders."  Attention  is 
directed  to  the  fundamental  fact,  which  has  frequently  been  overlooked 
in  the  public  discussion  of  the  measure,  that  "the  main  object  of  the 
Insurance  Act  was  to  improve  the  health  of  the  working  part  of  the 
community  and  by  its  results  in  this  direction  the  Act  must  be  judged." 
It  is  said  that  in  all  probability  the  National  Health  Insurance  Act 
was  "indirectly  the  outcome  of  the  report  of  the  Royal  Commission 
on  the  Poor  Laws."  but  that  unusually  exhaustive  and  thoroughly 
impartial  investigation  was  practically  ignored  in  all  the  subsequent 
legislation  concerning  the  welfare  of  underpaid  wage-earners  otherwise 
than  in  the  more  or  less  inadccjuate  attention  given  to  their  medical 
needs  under  national  health  insurance.  Although  both  the  majority 
and  the  minority  reports  of  that  commission  called  attention  to  the 
association  of  poverty  with  sickness,  according  to  Dr.  Brcud,  "miihrr 

177 


recommended  National  Insurance  as  a  remedy,  nor  took  the  view  that 
poverty  was  the  main  cause  of  ill  health."  In  contrast  to  other  well 
reasoned  conclusions  the  authors  of  the  National  Health  Insurance 
Act,  without  the  advantage  of  the  findings  of  a  royal  commission  or  at 
least  of  a  departmental  inquiry,  advanced  arguments  strongly  in  favor 
of  the  existence  of  a  much  more  intimate  relation  between  poverty 
and  sickness  than  is  actually  the  case.  After  clearly  emphasizing  the 
German  origin  of  the  National  Health  Insurance  Act,  Dr.  Brend 
properly  observes  that  "There  is  little  doubt  that  if  a  Royal  Com- 
mission had  been  appointed  to  inquire  into  the  state  of  public  health 
and  the  steps  necessary  to  improve  it,  a  very  different  measure  would 
have  been  introduced,  possibly  without  including  National  Insurance 
at  all.  The  main  responsibility  for  the  Act  rests  upon  Mr.  Lloyd 
George,  who  was  absolutely  without  any  experience  whatever  in 
matters  of  public  health  and  related  subjects,  including  insurance." 
As  observed  by  Dr.  Brend,  when  Mr.  Lloyd  George  introduced  the 
insurance  act  "he  had  not  held  any  of  the  oflBces  which  would  have 
brought  him  into  touch  with  public  health  affairs."  He  had  been 
President  of  the  Board  of  Trade  and  was  still  Chancellor  of  the  Ex- 
chequer, he  had  not  been  President  of  the '  Local  Government 
Board,  which  is  the  nearest  approach  to  a  Ministry  of  Health,  nor 
Secretary  of  the  Board  of  Education,  an  appointment  w^hich  might  at 
least  have  familiarized  him  with  conditions  of  health  among  children, 
nor,  as  far  as  publicly  known,  had  he  made  any  special  study  of  public- 
health  questions,  "or  had  other  experience  which  W'Ould  have  entitled 
him  to  be  regarded  as  an  expert.  Yet  he  had  constantly  advanced 
opinions  upon  the  most  erudite  questions  which  must  astound  many 
a  medical  officer  of  health."  The  underlying  reason  for  the  strong 
convictions  on  the  part  of  Mr.  Lloyd  George  was  unquestionably  the 
impression  made  upon  him  by  the  official  evidence  regarding  the 
alleged  success  of  social  insurance  in  Germany;  but  his  investigations 
were  exceedingly  superficial  and  upon  many  essential  questions  he  was 
no  doubt  deliberately  led  astray.  The  same  conclusion  properly 
applies  to  many  of  those  who  in  entire  fairness  have  in  this  country 
given  the  weight  of  their  indorsement  to  more  or  less  ill-reasoned  sug- 
gestions for  the  establishment  of  compulsory  health  insurance.  They 
have  been  or  are  being  misled  by  untrustworthy  statistics  and  guess- 
work opinion,  based  upon  hear-say  evidence  rather  than  upon  a  critical, 
qualified  and  strictly  impartial  analysis  of  the  facts.  As  pointed  out 
by  Dr.  Brend,  regarding  the  question  of  German  official  opinion, 
whether  representative  of  the  government  or  of  large  industries,  "as  a 
presentation  of  the  advantages  of  national  insurance  in  Germany  it  is 

178 


entirely  unconvincing  and  inadequate."  "Yet"  he  observes,  "it  was 
the  sole  evidence  of  this  kind  which  was  placed  by  the  Government 
before  the  country  previous  to  the  passing  of  the  Act  which  was  to 
apply  compulsion  to  one-third  of  the  population  and  cost  many  millions 
annually."*  The  National  Insurance  Act  of  Great  Britain  confers 
enormous  powers  upon  the  Insurance  Commissioners,  equivalent  if 
not  superior  to  those  of  Parliament  itself.  In  the  words  of  Dr. 
Brend,  "The  administration  has  been  allowed  to  assume  a  degree  of 
complexity  which  baffles  comprehension ;  the  medical  service  is  notori- 
ously inadequate  and  inefficient,  while  the  public  health  aspects  of  the 
Act  have  been  almost  lost  sight  of.  Doctors  and  chemists,  insured 
persons  and  society  officials,  are  all  alike  dissatisfied."  There  are  no 
reasons  for  believing  or  assuming  that  the  results  of  such  a  measure 
would  be  less  disastrous,  and  probably  much  more  so,  in  this  country 
than  in  Great  Britain. 

As  a  public-health  measure  national  health  insurance  in  Great 
Britain  has  been  a  conspicuous  and  indisputable  failure.  Not  one 
iota  of  evidence  has  been  forthcoming  that  national  health  has  been 
improved  in  any  specific  direction  whatever.  Not  even  the  anticipated 
statistics  of  the  sickness  of  wage-earners,  with  a  due  regard  to  causes 
and  conditioning  circumstances,  have  been  forthcoming.  The  su- 
premely important  subject  of  industrial  hygiene  and  all  that  has 
reference  thereto  under  national  health  insurance  has  not  derived  any 
advantages  therefrom  whatsoever.  In  so  far  as  the  official  publica- 
tions present  evidence  to  this  effect,  the  original  intention  to  form  local 
health  committees  for  administrative  purposes  was  soon  discarded 
and  insurance  committees  were  appointed  in  place  thereof,  without 
any  specific  assignment  of  duties  or  responsibilities  having  reference 
to  the  public  health  of  the  wage-earning  portion  of  the  population 
strictly  concerned  in  the  administration.  Having  failed  as  a  public- 
health  measure  the  act  has  been  equally  unsatisfactory  as  a  measure 
designed  to  improve  the  medical  treatment  of  those  afflicted  with 
disease  among  the  wage-earning  portion  of  the  population.  As 
observed  by  Dr.  Brend,  "The  standard  of  treatment  among  the  in- 
sured class  is  no  better  than  that  which  prevailed  before  the  passing 
of  the  Act."  What  constitutes  "adequate  treatment"  is  not  de- 
fined, but  under  the  rules  of  the  Insurance  Commissioners  adequacy 
is  assumed  to  represent  treatment  of  a  kind  "which  can  consistently 

♦In  the  preface  to  a  treatise  on  "Insurance  versus  roverty,"  l>y  L  Cliioizu  Money.  Mr  Lloyd 
George  has  placed  on  record  his  conviction  that  "In  C.crniany  the  inception  o(  the  scheme  was  not 
unaccompanied  by  discontent,  unpopularity  and  gloomy  prophecies.  Its  siiccesa  is  now  triumphAnt, 
unquestioned  alike  by  employers  and  employed.  It  was  from  C'.crmany  tliat  we  who  were  privileged 
to  be  associated  with  the  application  of  the  principle  to  the  Initeil  Kingdom  found  our  first  inspiration, 
and  it  is  with  her  experience  before  us  that  we  feel  confiilent  of  the  future." 

179 


with  tlie  best  interest  of  the  patient  properly  be  undertaken  by  a 
practitioner  of  ordinary  competence  and  skill."  This  definition  does 
not  square  with  the  intentions  of  the  Act,  and  in  consequence  the  stand- 
ard of  medical  practice  has  not  been  raised,  but  in  all  probability  it 
has  experienced  a  decided  lowering,  particularly  in  the  case  of  panel 
doctors  having  a  much  larger  number  of  clients  than  they  can  possibly 
adequately  care  for.  There  is  no  provision  in  the  Act  to  provide  the 
services  of  consultants,  surgeons,  gynecologists,  or  any  form  of  institu- 
tional treatment,  except  for  tuberculosis.  There  can  be  no  reasonable 
question  of  doubt  but  that  decidedly  better  results  would  have  been 
secured  under  a  whole-time  state  medical  service,  under  which  at  least 
the  wage-earning  portion  of  the  population  would  have  of  right  been 
entitled  to  whatever  medical  services  would  be  necessary  to  produce, 
if  possible,  a  speedy  and  permanent  cure.  Such  a  service  could  have 
come  into  existence  without  the  elaborate,  costly  and  largely  super- 
fluous administrative  machinery  which  hinders  rather  than  helps  the 
attainment  of  the  objects  and  purposes  for  which  national  health  in- 
surance came  into  existence.  As  stated  by  Dr.  Brend,  after  pointing 
out  that  the  insufficiency  of  the  medical  service  is  not  the  only  evil, 
"The  panel  system  has  increased  the  element  of  commercialism  in 
medical  practice;  it  has  done  nothing  to  strengthen  the  interest  of  the 
doctor  in  the  scientific  side  of  his  profession;  it  has  led  to  considerable 
ill  feeling  between  non-panel  and  panel  practitioners ;  and  it  has  brought 
about  the  evil  foreseen  from  the  first,  that  of  establishing  a  distinction 
between  the  rich  man's  and  the  poor  man's  door."* 

*It  is  strongly  suggested  to  all  who  desire  accurate  information  on  the  panel  system  that  they 
consult  the  recent  issues  of  the  British  Medical  Journal  and  especially  the  issues  of  October,  1919,  to 
Februarj',  1920,  containing  the  discussions  with  reference  to  the  proposed  terms  of  remuneration  and 
the  new  medical  benefit  regulations. 


180 


APPENDIX  A 

Some  Lessons  of  the  German  Failure  in  Compulsory 
Health  Insurance* 

Mr.  President  and  Gentlemen:  I  am  glad  of  this  opportunity  to  address  you  on 
a  matter  to  which  I  have  given  perhaps  as  much  time  and  thought  as  any  one  in  this 
country.  I  happen  to  have  been  born  in  Germany  and  to  have  grown  up  to  eighteen 
years  of  age  during  the  period  when  health  and  social  insurance  was  first  thought  of 
and  was  first  developed  in  its  initial  state.  I  left  Germany  in  the  year  18S4,  when 
the  first  social  insurance  law  went  into  effect.  I  left  very  largely  because  of  the  pre- 
liminary condition,  which,  in  my  judgment,  even  then  immature  as  it  was,  would 
have  made  any  future  existence  in  that  country  incompatible  with  any  sense  of  per- 
sonal independence  whatsoever,  and  if  I  have  been  opposed  and  am  opposed  to  the 
movement  for  compulsory  insurance  in  this  country,  it  is  not  because  of  my  profes- 
sional interests  in  The  Prudential  Insurance  Company  of  America.  I  am  opposed  to 
compulsory  insurance  for  the  reason  that  it  is  without  question  the  most  needless 
interference  with  the  social  and  economic  life  of  the  people  and  that  constitutes  one 
of  the  deliberate  forces  making  for  autocracy. 

The  primary  purpose  of  the  establishment  of  compulsory  social  insurance  in 
Germany  was  to  hinder  the  rise,  curtail  the  powers  and  ultimately  destroy  the  Social- 
istic movement,  chiefly  as  represented  by  the  political  activities  of  the  Social  Demo- 
cratic Party.  It  was  conceived  by  the  imperial  regime  as  a  paramount  necessity  to 
stabilize  and  perpetuate  the  imperial  throne  and  as  a  condition  precedent  to  the 
secret  projects  of  the  military  powers  for  world  conquest  and  imperial  aggrandize- 
ment. By  means  of  a  cleverly  devised  terminology  and  downright  methods  of 
deliberate  deception,  the  German  working  people  were  deluded  into  the  belief  that 
the  so-called  system  of  compulsory  health  insurance  was  primarily  intended  for  their 
benefit  as  the  most  effective  means  of  social  amelioration.  Yet,  what  was  called 
social  "insurance"  was  never  a  true  system  or  method  of  insurance  in  the  universally 
accepted  sense  of  the  term  as  derived  from  the  Rhodian  Sea  Laws,  in  which  the  principle 
of  equitable  contributions  proportionate  to  the  benefits  secured  was  first  laid  down 
and  laid  down  for  all  time.  But  the  recognized  social  value  of  insurance  methods  was 
clearly  realized  by  the  German  government  and  utilized  as  a  means  of  establishing 
the  most  drastic,  burdensome  and  unnecessary  system  of  social  control  conceivable, 
even  under  the  regime  of  an  imperial  and  military  autocracy,  for  in  all  the  autocracies 
of  the  past  the  government  concerned  itself  chiefly  witli  the  control  of  the  person  for 
military  purposes  and  the  au.\iliary  exercise  of  the  taxing  power  to  secure  the  required 
revenues  for  military  needs.  The  German  government,  clearly  realizing  in  the 
rising  tide  of  German  democracy  a  serious  menace  to  the  imperial  throne,  relied  uixjn 
the  system  of  compulsory  social  insurance  to  bring  about  the  complete  subjection 
of  German  wage-earners  to  the  will  and  the  whim  of  the  vast  bureaucratic,  and,  of 
course  primarily  political,  machine  organized  in  connection  therewith.  For  some 
thirty  years  the  goveniment  succeeded  in  thus  fostering  the  popular  delusion  that 
compulsory  health  insurance  was  really  serving  the  social  needs  of  the  Gcnnan  people, 

♦An  address  by  Frederick  L.  Hoffman,  from  the  Proceedings  o(  the  Third  Annual  Meeting  of  the 
West  Virginia  Manufacturers'  Association,  Huntington,  W.  Va.,  January  16-17.  1919. 

ISl 


Ijecause  of  Ihc  social  progress  attained  by  them,  in  response  to  increased  intelligence, 
successful  inlcrnational  competition,  opportunities  for  foreign  trade,ahigh  protective 
tariff;  all  fostering  German  industries,  and  individual  advancement,  naturally  desired 
by  every  man  and  woman  above  the  level  of  the  brute. 

The  spirit  of  Socialism  in  Germany  was,  however,  not  diminished,  but  quite  to 
the  contrary  strongly  accentuated  by  social  insurance,  which  did  not  remove  the  true 
and  underlying  causes  of  social  unrest.  In  1884,  when  the  social-insurance  system 
came  into  existence,  the  Socialistic  vote  was  550,000.  In  1912,  and  regardless  of 
every  effort  at  suppression  and  discouragement,  the  vote  was  4,250,000.  Socialism 
had  its  rise  in  Germany  largely  because  of  intolerable  social  and  political  conditions, 
ignoljle  class  distinctions  and  autocratic  interference  in  the  private  affairs  of  the  peo- 
ple. As  has  well  been  said  by  a  brilliant  French  writer  on  Anglo-Saxon  superiority, 
M.  Edmund  Demolins,  "Socialism  is  essentially  a  product  of  German  origin  and 
manufacture — its  center  of  formation  is  in  Germany;  it  is  from  Germany  that  it 
permeates  the  world."  And,  as  observed  by  a  member  of  the  Reichstag,  Bamber- 
ger, "A  remarkable  thing  is  that  Socialistic  ideas  have  found  nowhere  a  better 
welcome  than  in  Germany.  Not  only  do  these  ideas  fascinate  the  work  people, 
but  the  middle  classes  cannot  resist  them,  and  we  often  hear  persons  of  that  class 
saying  'Why,  indeed,  perhaps  everything  may  go  on  better  thus;  why  should  there 
not  be  a  trial?'  Moreover,  Socialism  has  reached  the  upper  classes;  it  has  a  seat  in 
the  academies;  it  speaks  from  the  lecture  chair  in  the  universities."  Also,  in  the 
words  of  Demolins,  "It  may  be  said  that  the  genera  of  Socialists  are  to  be  found  in 
Germany — Revolutionary  Socialists,  Conservative  Socialists,  Evangelical  Socialists, 
Catholic  Socialists,  who  lecture  in  the  very  universities.  Such  a  general  and  varied 
blossoming  is  proof  enough  that  this  plant  has  found  in  Germany  a  most  favorable 
soil  for  its  growth  and  efflorescence." 

The  foundation  document  of  German  social  insurance  was  signed  by  Emperor 
William  I  on  November  17,  1881.  The  armistice  terminating  the  world  war  was 
signed  by  a  Socialist  in  behalf  of  the  German  people  on  November  11,  1918.  The 
paternalistic  system  had  been  tried  and  been  found  wanting.  Though  but  half- 
realized  even  now,  the  pseudo-Socialistic  order  established  by  the  fiat  of  the  govern- 
ment, was  ended  for  all  time.  As  foreshadowed  by  Demolins  in  his  praise  of  Anglo- 
Saxon  superiority  and  private  initiative  and  self-help,  "The  social  problem  is  not 
solved  by  tending  assistance  to  individuals  any  more  than  the  secret  of  life  consists 
in  keeping  ourselves  alive  by  dint  of  swallowing  drugs.  Neither  assistance  nor  drugs 
is  a  natural  or  a  normal  means  of  sustaining  life.  It  is  true  wisdom  to  manage  without 
artificial  aids." 

All  compulsory  social  insurance  rests  upon  profound  misconceptions  of  life  and 
labor  in  a  democracy,  for  it  involves  the  establishment  of  a  permanent  class  distinc- 
tion in  precisely  the  same  pernicious  manner  as  class  distinctions  were  established  in 
England  under  the  Poor  Law  of  1601.  Social  insurance  in  Germany  was  never  more 
than  a  carefully  designed  but  most  insidious  form  of  poor-relief,  or  supplementary 
grants-in-aid,  required  to  amplify  insufficient  incomes  or  to  offset  unwholesome  or 
otherwise  detrimental  environmental  conditions.  The  relative  improvement  in  these 
conditions  in  Germany  during  the  last  forty  years  was  unquestionably  remarkable, 
but,  nevertheless,  in  decided  contrast  to  the  more  thoroughgoing  social  and  economic 
progress  of  Great  Britain  and  the  United  States  and  other  industrial  nations  of  the 
world.  In  place  of  a  state  poHcy,  aiming  deliberately  at  a  higher  standard  of  living 
among  wage-earners  and  their  dependents,  as  fundamentally  conditioned  by  higher 
wages,  shorter  hours,  a  lesser  proportion  of  children  and  married  women  at  work,  a 

182 


more  wholesome  system  of  housing  compatible  with  modem  conceptions  of  home 
life,  better  and  more  nutritious  food  and  at  lower  prices,  the  deliberate  control  of 
the  drink  evil,  prostitution,  public  lotteries,  etc.,  the  late  German  Imperial  Govern- 
ment chose  the  fatuous  course  of  a  system  of  amelioration  and  relief,  cleverly 
designed  under  high-sounding  terms  of  welfare  and  insurance,  in  place  of  conceding 
the  rightful  exercise  of  true  personal  and  political  freedom  inherent  in  the  life  of  the 
people  of  any  and  every  modern  State. 

The  system  was  a  failure  even  in  the  direction  in  which  it  had  been  anticipated 
it  would  be  most  successful.  The  amounts  paid  out  in  the  form  of  relief  were,  broadly 
speaking,  inadequate  or  insufficient  to  provide  the  workman  concerned  or  his  family 
with  the  required  degree  of  economic  security  common  to  the  people  of  this  country. 
The  medical  attendance  was  far  from  being  the  high  degree  of  intrinsic  medical  skill, 
called  for  in  conformity  to  the  remarkable  progress  in  modern  medicine  and  sur- 
gery. The  low  average  earnings  of  most  of  the  members  of  the  medical  profession  in 
Germany  were  out  of  all  proportion  to  their  social  and  professional  status.  They, 
indeed,  perhaps  more  than  any  other  element  of  the  German  people,  deliberately 
exchanged  a  condition  of  relative  freedom  for  absolute  bondage.  The  so-called  panel 
system  resulted  in  the  entrenchment  of  mediocrity  in  medical  service  by  discouraging 
the  fullest  exercise  of  unusual  skill.  Another  and  truly  lamentable  result  of  German 
compulsory  sickness  insurance  was  to  bring  hito  existence  a  vast  amount  of 
alleged  illness,  or  an  exaggeration  of  the  relative  importance  of  minor  ailments,  in- 
volving enormous  and  largely  unnecessary  disbursements,  followed  in  certain  indus- 
tries at  least  by  serious  difficulties  in  international  competition.  No  wonder  that, 
with  a  full  understanding  of  the  fragile  fabric  erected  with  such  consummate  skill  in 
false  pretense  and  elaborate  deception  the  late  German  Imperial  Government  should 
have  initiated  and  supported  with  an  abundance  of  means  a  subtle  propaganda  for 
the  organization  of  corresponding  institutions  or  methods  in  all  the  industrial  coun- 
tries with  which  her  people  were  in  constant  and  often  strenuous  inteniational  com- 
petition. 

But  the  propaganda  failed,  at  least  in  this  country,  just  as  it  deserved  to  fail  in 
other  countries,  particularly  in  the  United  Kingdom,  where,  unhappily,  in  response 
to  ill-considered  suggestions,  a  plan  of  compulsory  health  insurance  was  adopted  in 
1911.  In  the  words  of  Dr.  William  A.  Brend,  author  of  a  standard  treatise  on 
"Health  and  the  State,"  written  largely  with  reference  to  the  pernicious  effects  of 
national  health  insurance. 

The  National  Health  Insurance  Act  is  the  most  ambitious  piece  of  public 
health  legislation  ever  carried  through  in  this  country.  No  previous  measure 
has  directly  affected  so  large  a  number  of  persons,  involved  so  great  a  cost, 
made  such  demands  upon  administration,  or  been  introduced  with  such  lavish 
promises  of  benefit  to  follow,  and  no  previous  measure  has  ever  failed  so  signally 
in  its  primary  object. 

In  explanation  of  his  views,  based  upon  large  experience,  patient  inquiry  and 
impartial  consideration,  he  remarks  that 

Probably  the  greatest  obstacle  to  the  deveIoi)nunt  of  a  sound  and  c(»m- 
prehensive  scheme  for  protecting  the  health  of  the  community  has  been  the 
failure  of  legislators  to  appreciate  the  complexities  and  tiiflicullics  of  the  ques- 
tions with  which  they  are  dealing.  Pulilic  health  is  a  science  which  demands 
years  of  study  for  its  uiulerstaiuliiiK;  many  of  its  problems  are  obscure,  and 
often  the  seemingly  apparent  remedies  for  its  defects  may  be  more  harmful 
than  beneficial.     Health  legislation  in  Parliament  has  always  suffered  from 

183 


the  most  complete  absence  of  scientific  medical  criticism,  and  the  Insurance 
Act  was  no  cxcei)tion  to  this  rule.  In  its  genesis,  in  its  modifications  in  the 
House  of  Commons,  and  very  largely  in  its  subsequent  administration,  it  has 
been  the  work  of  amateurs,  and  it  contains  in  consequence  the  most  glaring 
blunders. 

What  is  true  of  England  is  even  more  true  of  Germany.  Compulsory  health  in- 
surance did  not  improve  the  health  of  the  working  portion  of  the  community,  nor  did 
it  materially  raise  the  standard  of  public  health.  All  the  more  conspicuous  and 
gratifying  results  in  the  improvement  of  social  conditions,  the  lowering  of  the  death 
rate,  the  gradual  eliminating  of  preventable  diseases,  etc.,  were  secured  more 
effectively  in  this  country  and  entirely  without  compulsory  insurance  than  in  Ger- 
many or  the  United  Kingdom,  in  consequence  of  the  establishment  of  pseudo- 
insurance  institutions  ostensibly  serving  public-health  purposes.  Most  of  the 
social-service  institutions  which  have  come  into  existence  in  Germany  under  social 
insurance  have  been  established  in  this  country  in  consequence  of  an  aroused  social 
consciousness,  such,  for  illustration,  as  far  better  hospitals,  better  infirmaries,  better 
dispensaries,  better  safety-first  rules  and  regulations,  etc. 

In  its  financial  aspect  the  system  presents  at  the  present  time  a  condition  of 
hopeless  chaos.  The  German  government  has  not  published  a  thoroughly  digested 
analysis  of  its  social-insurance  experience,  or  presented  full  financial  statements, 
with  a  due  consideration  of  every  important  element  of  cost.  By  a  skilful  process  of 
financial  juggling,  it  has  so  interrelated  the  workings  of  the  different  social-insurance 
institutions  that  it  is  impossible  to  disentangle  the  statistical  evidence,  all  of  which 
is  more  or  less  confusing  and  inconclusive.  The  German  government  encouraged 
in  every  way  the  belief  that  the  expense  of  administration  was  comparatrv'ely  slight, 
by  carefully  disregarding  the  shifting  of  the  incidence  of  true  costs,  to  other  adminis- 
trative bureaus,  or  departments,  or  branches,  of  the  government.  The  enormous 
army  of  officials  brought  into  existence  under  such  an  extremely  complicated  system 
resulted  necessarily  in  a  material  increase  in  taxation,  not  reapportioned  or  properly 
reapportionable  to  the  different  branches  of  the  social-insurance  system.  By  the 
issue  of  a  veritable  flood  of  official  publications  on  the  compulsory  insurance  system 
the  German  government  for  years  carried  on  a  most  successful  propaganda  in  favor 
of  the  extension  of  the  system  into  other  countries  of  the  world.  Appealing  success- 
fully to  the  non-critical  mind  of  the  average  investigator,  or  so-called  social  reformer, 
the  ofiicial  statements  emanating  from  the  German  government  soon  became  the 
current  form  of  praise  and  flattery  of  the  system  on  the  part  of  those  in  authority, 
leaders  of  thought  and  public  opinion,  but  in  bitter  truth  unworthy  of  public  con- 
fidence and  trust.  Commissions  sent  abroad  to  investigate  the  system  at  consider- 
able expense,  generally  returned  only  wiih  so-called  "evidence,"  easily'  secured  from 
official  sources,  frequently  with  the  skilful  aid  of  German  "experts"  in  the  employ 
of  the  late  Imperial  Government.  Elaborate  treatises  on  "The  German  Workman," 
"Social  Insurance  in  Germany,"  "Medical  Benefit  in  Germany  and  Denmark," 
"Workmen's  Insurance  in  Europe,"  "Insurance  and  the  State,"  "State  Insurance," 
"Recent  Industrial  Progress  in  Germany,"  etc.,  one  and  all  reflect  rather  the  in- 
sidiousness  of  the  German  propaganda  and  the  pernicious  influence  of  German 
thought  than  the  originality,  the  abiUty  and  the  intellectual  honesty  of  the  writers 
essaying  upon  a  subject  obviously  quite  outside  of  the  range  of  their  full  under- 
standing. 

American  economists,  mostly  with  training  in  German  universities,  practically 
one  and  all  have  sounded  the  praises  of  the  German  system  of  social  insurance,  of 

184 


German  methods  of  social  reform  and  of  German  principles  of  social  reconstruction, 
with  faint  praise  or  scant  appreciation  of  what  has  been  done  and  is  being  done  in  the 
United  States,  and  in  conformity  to  the  free  institutions  of  our  republic  and  the 
fundamental  principles  of  a  genuine  democracy.  The  one  notable  exception,  per- 
haps, is  the  clear  and  penetrating  grasp  of  President  Arthur  Twining  Hadley,  of  Yale 
University,  who  in  his  treatise  on  economics,  as  early  as  1897,  said:  "There  are 
many  reformers  who  are  anxious  that  other  countries  should  follow  the  example  of 
Germany.  But  the  experiment  has  not  progressed  far  enough  to  pass  judgment  on 
its  success.  In  many  respects  the  gain  to  the  public  from  a  system  of  this  kind  is 
more  apparent  than  real.  The  payments  to  the  insurance  fund  must  chiefly,  if  not 
wholly,  come  out  of  wages.  Even  though  they  may  be  nominally  levied  on  the 
employer,  he  is  compelled  by  competition  with  other  employers  who  arc  not  subject 
to  this  levy  to  reduce  in  corresponding  degree  the  reveinues  which  he  pays."  As  high 
an  authority  as  Professor  Taussig,  in  his  "Economics,"  concedes  that  "The  outcome 
is  likely  to  be  that  the  (compulsory)  insurance  charges  will  ultimately  come  out  of 
the  workman's  own  earnings.  This  will  take  place  and  not  necessarily  by  any  process 
of  direct  reductions  in  wages,  but  more  probably  in  progressive  countries  like  Ger- 
many and  England  by  a  failure  of  wages  to  advance  as  much  as  they  would  otherwise 
do." 

At  root  the  compulsory  insurance  problem  is  first  and  last  a  labor  question.  If 
the  social  condition  of  labor  is,  broadly  speaking,  as  satisfactory'  as  it  generally  is 
throughout  the  United  States,  the  necessity  for  a  subsidized  form  of  poor-relief  in  the 
disguise  of  social  insurance  obviously  does  not  arise,  even  remotely  as  a  matter  of 
political  expediency.  But  in  countries  with  low  standards  of  labor  and  life,  with  a 
government  administered  by  an  entrenched  autocratic  governing  class,  remote  from 
the  life  and  labor  of  the  wage-earning  element,  the  compulsory  insurance  principle 
is  quite  likely  to  appeal  as  a  panacea  or  a  solution,  even  though,  as  in  Germany,  it 
prove  merely  the  means  of  postponing  tlie  inevitable  disaster  for  a  generation  or  two. 
For  the  principle  itself  is  unsound  and  has  been  proved  unsound,  because  it  docs 
violence  to  the  universal  law  of  all  social  progress,  that  "Nothing  but  the  slow  modi- 
fication of  human  nature  by  the  discipline  of  social  life  can  produce  permanently 
advantageous  changes,"  and  it  is  equally  true,  in  the  words  of  Herbert  Spencer,  that 
"The  root  of  a  well-ordered  social  action  is  a  sentiment  of  justice  which  at  once  insists 
on  personal  freedom  and  is  solicitous  for  the  like  freedom  of  others."  "I'nhappily," 
he  observes  in  connection  therewith,  "there  at  present  exists  but  a  very  inadequate 
amount  of  this  sentiment,"  but  in  the  successful  fostering  of  sentiments  of  justice, 
independence  and  self-reliance  lies  the  future  safety  and  perpetuity  of  our  demcK-ratic 
institutions  and  the  republic  which  rests  upon  them.  The  failure  of  social  insurance 
was  precisely  the  disregard  of  fundamental  principles  of  social  justice  and  the  inherent 
wrongfulness  of  class  distinctions,  making  vast  numl)ers  helplessly  dependent  in 
matters  of  vital  concern  upon  a  small  governing  class,  thoroughly  entrenched  and 
determined  at  all  costs  to  hinder  tlie  true  social  and  political  development  of  the 
masses.  Whether  the  system  will  lie  continued  under  the  new  regime  is,  of  course,  an 
open  question.  If  there  should  be,  as  contemplated  by  certain  radical  elements  more 
or  less  in  control,  a  repudiation  of  war  obligations  in  which  most  of  the  funds  have 
largely  invested,  the  entire  fabric  obviously  would  collapse.  Since  these  institutions 
represent  chiefly  wage-earners'  investments,  this  course,  however,  is  not  likely  to  be 
pursued.  But  if,  as  is  practically  a  foregone  conclusion,  the  internal  debts  contracted 
in  consequence  of  the  war  shall  be  ultimately  reconverted  with  substantial  reductions 
both  in  amount  and  in  interest  earnings,  the  outlook  for  the  future  of  social-insurance 

185 


institutions  is  decidedly  alarming.  I^or  naturally,  in  consequence  of  the  war,  both 
the  sickness  and  the  mortality  rates  have  been  considerably  increased,  aside  from  a 
clearly  recognized  physical  deterioration  of  the  German  working  people,  men  and 
women,  best  emphasized  in  the  following  extract  from  the  medical  report  of  one  of  the 
sanatoria  under  the  control  of  the  Munich  Communal  Sick  Fund,  to  the  effect  that 
"Nearly  all  of  the  patients  arrive  at  the  institution  in  a  more  or  less  alarming  condi- 
tion of  undcr-nourishment.  Many  of  them,  also,  exhibit  unmistakable  signs  of  war 
consequences  in  the  greater  frequency  of  occurrence  of  nervous  diseases." 

Confronted  with  a  possible  substantial  loss  in  their  investments,  a  decline  in 
interest  earnings,  the  practical  certainty  of  the  deferred  payment  of  such  earnings  on 
war  obligations,  a  higher  death  rate,  particularly  in  adult  life,  a  material  increase  in 
general  morbidity,  as  well  as  in  premature  invalidity,  together  with  diminished  con- 
tributions from  those  incapacitated  for  work,  while  at  the  same  time  in  need  of  in- 
creased support,  the  German  social-insurance  institutions  face  the  practical  certainty 
of  disaster,  now  or  in  the  not  far  distant  future,  as  the  case  may  be. 

The  profound  conviction  that  the  German  cause  of  world  conquest  was  largely 
conditioned  by  the  German  conception  of  so-called  social  or  compulsory  insurance, 
equivalent  to  the  social  control  of  the  wage-earning  element  and  the  establishment  of 
permanent  class  distinctions,  as  a  prerequisite  to  the  perpetuity  of  autocratic  im- 
perial military  power,  finds  ample  support  in  the  statement  issued  by  the  late  Im- 
perial Chancellor  in  his  first  address  to  the  German  parliament  as  recently  as  October 
6,  1918,  when  he  said  in  part  that: 

At  the  peace  negotiations  the  German  Government  will  use  its  efforts  to 
the  end  that  the  treaties  shall  contain  provisions  concerning  the  protection  of 
labor  and  insurance  of  laborers,  which  provisions  shall  oblige  the  treaty-making 
states  to  institute  in  their  respective  lands  within  a  prescribed  time  a  minimum 
of  similar,  or  at  least  equally  effective  institutions  for  the  security  of  life  and 
health  as  for  the  care  of  laborers  in  the  case  of  illness,  accident  or  invahdism. 

The  German  delegates  to  the  peace  conference  will  be  given  no  opportunity  of 
presenting  proposals  tb  this  effect.  They  will  be  more  seriously  concerned  with  ques- 
tions involving  the  very  fact  of  their  future  political  existence  and  the  permanency 
of  peaceful  relations  with  the  remainder  of  mankind.  The  German  propaganda  for 
the  extension  of  compulsory  health  insurance,  particularly  into  countries  like  the 
United  States,  will  have  come  to  an  end.  The  subtle  menace  of  the  further  spread 
of  German  ideas  of  government  and  social  control  may  now  happily  be  considered 
a  thing  of  the  past.  The  emphatic  verdict  of  the  American  people  has  been  rendered 
upon  the  numerous  proposals  which  have  been  made  for  the  establishment  of  com- 
pulsory health  insurance  in  this  country,  of  which  a  most  assuring  as  well  as  conclu- 
sive expression  is  the  defeat  of  the  proposed  constitutional  amendment  in  the 
State  of  California  by  a  vote  of  nearly  three  to  one.  For  to  the  American  propa- 
ganda for  compulsory  health  insurance  applies  with  entire  truth  the  dictum  that  it 
was  "made  in  Germany"  and  sustained  by  German  interests,  governmental  or  other- 
wise, concerned  with  its  universal  adoption  in  the  United  States.  While  thoroughly 
condemned  by  Mr.  Samuel  Gompers,  President  of  the  American  Federation  of  Labor, 
and  not  approved  by  the  American  medical  profession,  nor  endorsed  by  American 
business  interests,  this  alleged  panacea  of  social  reform  has  been  offered  to  one  State 
after  another  by  the  American  Association  for  Labor  Legislation  in  the  City  of  New 
York,  regardless  of  all  the  evidence  that  the  system  is  neither  needed  nor  wanted  by 
the  mass  of  American  wage-earners  and  their  dependents.     In  a  manner  thoroughly 

186 


undemocratic  and  opposed  to  the  first  principles  of  a  representative  form  of  govern- 
ment, this  association  and  individuals  allied  to  it  continue  to  flood  the  country  with 
misleading  assertions,  with  cleverly  disguised  fallacies,  supported  by  the  wrongful 
use  of  names  of  men  of  authority,  whose  opinions  at  best  but  represent  merely  a  desire 
to  support  any  measure  or  means  whereby  the  social  condition  of  the  people  may  be 
improved. 

The  most  dangerous  tendency  in  American  public  life  today  is  the  irresponsi- 
bility of  public  utterances  on  the  part  of  men  and  women  in  positions  of  authority, 
whose  judgment  is  relied  upon  by  the  public  and  accepted  in  good  faith,  but  who 
speak  neither  with  the  knowledge  nor  the  understanding  sufficient  to  essay 
upon  many  questions  and  problems  which  seriously  concern  the  future  welfare  of 
our  people.  Our  own  failure  in  academic  and  intellectual  honesty  is  as  serious  and  as 
sinister  as  the  failure  of  the  German  system  of  social  insurance,  which  happily  concerns 
only  the  German  people.  As  a  concrete  illustration,  I  cannot  do  better  than  direct 
attention  to  a  treatise  very  recently  issued  on  "Social  Insurance  in  the  United  States," 
by  Gurdon  Ransom  Miller,  Ph.D.,  Professor  of  Sociology  and  Economics  and  Dean 
of  the  Senior  College,  Colorado  Teachers'  College.  This  book  bears  an  editor's  pre- 
face signed  by  Frank  L.  McVey,  Ph.D.,  LLD.,  President  of  the  University  of  Ken- 
tucky, who  concludes  with  the  opinion  that  the  author  of  the  work  "has  done  an 
interesting  and  worth-while  piece  of  work  that  will  find  a  place  in  the  series  of  hand- 
books on  social  science,  of  which  it  is  one."  It  is  my  own  deliberate  opinion,  based 
upon  a  thorough,  critical  analysis  of  the  work,  that  it  is  a  grave  imposition  upon  the 
credulity  of  the  American  public  and  a  thoroughly  unworthy  and  grossly  misleading 
contribution  to  social  science,  whatever  in  the  broad  or  restricted  sense  of  the  term 
that  may  be.  There  is  not  a  page  in  this  book  which  is  not  full  of  errors,  there  is  not 
a  single  conclusion  advanced  which  is  in  strict  conformity  to  the  facts,  but  through- 
out it  breathes  the  subtle  poison  of  intentional  plagiarism,  of  clever  manipulations, 
of  extracts  from  partisan  publications  on  the  subject,  chiefly  those  of  the  American 
Association  for  Labor  Legislation.  The  book  itself  contradicts  the  author's  assertion 
that  "Today  our  best  thinking  on  social  problems  is  guided  directly  or  indirectly  by 
university  influence."  The  health-insurance  amendment  proposed  to  the  people  of 
California  was  decisively  defeated,  regardless  of  the  fact  of  a  last  public  appeal  to 
the  voters,  full  of  misstatements  in  matters  of  fact  and  concrete  inference,  signed 
and  widely  disseminated  over  the  signature  of  the  President  of  Leland  Stanford 
University ! 

All  of  the  so-called  evidence  in  favor  of  social  insurance  has  been  derived  chiefly 
from  official  but  inadequate  sources,  with  a  deliberate  disregard  of  the  truth,  readily 
available,  proving  conclusively  the  disastrous  consequences  of  the  German  system 
upon  the  mind,  the  life  and  the  labor  of  the  German  people.  It  would  be  quite 
impossible  within  the  limitations  of  time  to  do  justice  to  this  aspect  of  tlie  present 
discussion  and  what  follows  is  of  necessity  restricted  to  compulsory  healtli  insurance, 
but  with  the  evidence  practically  down  to  date.  It  would  also  be  impossible  to 
further  enlarge  upon  the  evidence  from  refiable  sources,  whicli  is  conclusive  and 
which  may  be  briefly  summarized  as  follows: 

Instead  of  eflectively  suppressing  social  democracy  throughout  the  German  Km- 
pire,  the  social-insurance  institutions  merely  served  the  purpose  of  furthering  the 
spread  and  more  general  acceptance  of  radical  Socialistic  doctrines,  sustained  by  the 
feudalism  and  paternalism  of  the  late  German  Imperial  Government.  When  social  in 
insurance  came  into  existence  the  Socialistic  Party  vote  was  appro.\imatcly  half  a  mil- 
lion, whereas  at  the  outbreak  of  the  world  war  the  voting  strength  of  the  Socialists  had 

187 


reached  four  millions  and  a  half.  While  paternalistic  social  insuranccwas  inaugurated 
by  an  imperial  message  signed  by  William  I,  it  came  to  an  end  by  the  abdication  of 
William  II  and  the  abject  surrender  of  the  German  military  regime  in  the  armistice 
bearing  the  signature  of  the  leader  of  the  Socialistic  Party! 

Instead  of  lessening  the  prevailing  amount  of  social  unrest,  the  social  insurance 
institutions  merely  increased  the  demand  for  additional  benefits  out  of  all  proportion 
to  the  intrinsic  value  of  the  financial  contributions  made  by  employers  and  employees. 

Instead  of  substantially  improving  the  economic  condition  of  German  wage- 
earners,  the  benefits  provided  through  social  insurance  were  never  adequate  to  meet 
more  than  the  requirements  of  a  minimum  standard  of  life. 

Contrary  to  wrongful  assertions  concerning  the  physical  progress  of  the  German 
people  under  social  insurance,  the  comparative  statistics  of  physical  well-being  prove 
conclusively  the  prevalence  of  a  large  amount  of  constitutional  diseases,  lack  of  dis- 
ease resistance,  want  of  normal  physical  development,  etc. 

In  the  direction  of  sanitary  reform  the  corresponding  progress  throughout  the 
United  States  was  measurably  in  advance  of  German  achievements.  The  German 
death  rate  under  social  insurance  has  not  been  diminished  proportionately  to  the 
decrease  secured  in  this  country  in  response  to  a  far-sighted  and  more  liberal  public 
policy. 

Since  the  outbreak  of  the  war  tuberculosis  has  rapidly  increased  throughout  Ger- 
many and  the  institutions  established  for  tuberculous  wage-earners  have  been  largely 
utilized  for  war  and  poor  law  purposes.  The  number  of  patients  treated  and  the 
amounts  heretofore  provided  for  tuberculous  wage-earners  under  social  insurance 
have  since  1914  been  reduced  by  more  than  one-half,  while  the  amounts  raised  for 
these  purposes  have  been  diverted  to  war  charities. 

The  condition  of  the  medical  profession  throughout  Germany  has  not  been 
materially  improved,  but  quite  to  the  contrary  the  ethical  standards  have  been  per- 
ceptibly lowered,  attaining  in  some  communities  to  the  proportions  of  a  positive 
public  scandal.  The  better  professional  element  has  been  discouraged  by  the  oppor- 
tunities extended  to  the  more  unscrupulous  to  encourage  malingering  and  fraud 
and  wide-spread  imposition  upon  the  funds. 

The  sickness  rate  among  German  wage-earners  has  not  been  reduced,  but  remains 
at  a  figure  far  above  any  corresponding  conditions  of  ill-health  disclosed  by  impartial 
investigations  in  this  country.  In  many  of  the  funds  more  than  half  of  the  wage- 
earners  will  claim  sickness  and  medical  benefits  throughout  the  year. 

In  consequence  of  the  industrial  changes  resulting  from  the  war,  a  large  number 
of  women,  children  and  aged  persons  have  been  admitted  to  membership  in  the  sick- 
ness and  invalidity  funds  under  conditions  opposed  to  conservative  management. 

Not  only  has  the  government  been  reckless  or  indifferent  in  the  general  adminis- 
tration of  the  funds,  but  there  has  been  the  utmost  tolerance  in  permitting  expendi- 
tures for  war-charity  purposes,  out  of  all  proportion  to  the  financial  resoinces  of  the 
funds. 

If  reckless  in  the  direction  indicated,  the  late  government  virtually  looted  the  ac- 
cumulated funds,  especially  of  the  invalidity-insurance  institutions,  by  insisting  upon 
the  compulsory  investment  in  war  loans.  The  social-insurance  institutions  subscribed 
one  and  a  half  billion  marks  to  the  first  seven  war  loans,  and  at  the  present  time  the 
invalidity-insurance  institutions  have  apparently  over  half  of  their  investments  in 
war  obligations.  Since  the  institutions  lost  considerably  in  the  sale  of  first-class 
securities,  which  were  replaced  by  war  loans  of  doubtful  intrinsic  value,  the  ultimate 
losses  from  these  sources  will  unquestionably  be  very  considerable. 

188 


In  the  industrial  accident  branch  of  social  insurance,  the  government  has  approved 
very  substantial  reductions  in  the  assessments  as  a  matter  of  war  necessity,  regardless 
of  an  increase  in  accident  frequency  on  account  of  the  employment  of  women,  children 
and  aged  persons  without  previous  factory  experience. 

It  is  a  foregone  conclusion  that  German  wages  must  suffer  a  very  substantial 
decline  in  consequence  of  the  war  and  the  readjustment  of  international  relations, 
more  or  less  burdensome  to  the  German  people.  Since  the  whole  social -insurance 
system  rests  upon  the  compulsory  deduction  from  wages,  on  the  one  hand,  and  the 
compulsory  contributions  by  employers,  on  the  other,  the  inference  would  seem  justi- 
fied that  if  the  products  of  German  industry  are  in  the  future  to  meet  international 
competition,  the  burdens  of  social  insurance  will  have  to  be  materially  reduced. 
But,  on  the  other  hand,  the  increasing  economic  distress,  the  large  proportion  of 
more  or  less  dependent  war  invalids,  the  large  increase  in  the  number  of  widows  and 
orphans  in  need  of  financial  support,  will  require  rather  an  increase  than  a  diminution 
of  the  benefits  likely  to  be  derived  from  the  social-insurance  system. 

After  all,  the  most  lamentable  consequence  of  social  insurance  in  Germany  has 
been  the  measurable  lowering  of  the  social  and  individual  morality  of  the  German 
people.  The  system  in  every  direction  has  fostered  dishonesty,  deception  and  dis- 
simulation. Imposition  upon  the  funds,  the  drawing  of  sick-pay  during  periods  of 
unemployment  as  the  basis  of  certificates  of  illness  wrongly  issued  by  attending 
physicians,  had  become  the  rule  rather  than  the  exception  throughout  Germany  at 
the  outbreak  of  the  war.  Numerous  investigations  made  by  impartial  inquiry  reveal 
the  wide-spread  practice  of  malingering,  frequently  attaining  to  half  the  proportion 
of  all  the  sick  claims,  chiefly  made  for  short  periods  of  time  and  involving  in  the  aggre- 
gate enormous  burdens  upon  German  industry. 

The  German  experience  proves  the  inadequacy  of  social  insurance  as  an  efTective 
means  of  securing  the  required  degree  of  continuous  social  progress  demanded  by 
modem  standards  of  labor  and  life.  The  fundamental  princii)le  of  such  progress 
is  social  justice  and  the  largest  measure  of  political  and  social  freedom  consistent  with 
the  security,  the  well-being  and  the  happiness  of  all.  The  German  experiment  in 
paternalism  and  coercion  sounds  the  most  convincing  note  of  warning  to  other  indus- 
trial countries,  where  under  free  institutions,  under  conditions  of  voluntary  service, 
savings  and  self-sacrifice,  infinitely  better  and  more  lasting  results  have  been  achieved. 
It  is  devoutly  to  be  hoped  that  the  warning  will  be  heeded  by  the  American  people 
and  that  they  will  develop  a  strong  and  thoroughly  cfTeclivc  opposition  to  any  and 
every  tendency  towards  autocracy,  paternalism  and  coercion,  under  the  plea  of 
vSocial  Insurance  as  inherently  hostile  and  fatal  to  our  traditional  conceptions  of 
personal  and  political  liberty  in  a  democracy. 

At  every  international  exposition  for  the  past  thirty  years  Germany  has  had 
elaborate  exhibits  in  the  advocacy  of  social  insurance.  At  St.  Louis  Germany  had 
an  exhibit  later  presented  to  Harvard  University  for  the  ostensible  purpose  of 
teaching  a  new  system  of  social  amclioralion,  which  in  fact  is  radically  opposed  to 
our  own. 

My  plea  is  that  you  seriously  consider  these  questions,  and  that  you  do  not 
allow  them  to  be  treated  with  indHTerence  and  to  go  unchallenged.  West  Virginia 
may  be  the  last  State  to  adopt  social  insurance  or  it  may  be  the  first.  We  never 
know  which  State  in  an  unguarded  moment  may  take  some  parental  interest  in  a 
measure  that  on  its  face  seems  to  be  for  the  benefit  of  the  people. 

If,  on  the  face  of  it,  it  will  seem  to  do  so  much  good  and  to  protect  the  people 
in  sickness  and  in  old  age,  why  not  adopt  it?     But  one  tiling  is  sure  tiic  manu- 

189 


facturers  will  pay  for  it,  and  the  Stale  will  paj'.  I  leave  it  to  you  as  the  most  serious 
business  concern  that  faces  you  at  the  present  time.  The  larger  employer  may  not 
have  the  same  (lilTicultics  as  the  smaller  employer,  but  unless  you  gentlemen  think 
about  it  and  cslal)lish  a  real  understanding  of  all  that  is  implied  in  this  propaganda, 
you  may  find  sooner  or  later  that  what  now  is  mere  propaganda  has  become  law, 
has  become  a  fact,  and  has  become  a  menace  to  the  extent  that  what  you  cherished 
most  by  way  of  personal  initiative,  private  enterprise  and  private  control  has  gone 
as  the  liquor  interests  will  have  gone  when  the  necessary  number  of  states  have 
adopted  the  prohibition  amendment. 


190 


INDEX 


Abbott,  Edith,  on  health  insurance  in  Great 
Britain,  94 

Accidents,  increase  of,  in  Germany,  189 

Accident — prevention,  U.  S.  leads  the 
world,  57 

Administration  complexities,  health  insur- 
ance, 75,  127,  142,  143,  158,  160 

Advantages  claimed  for  compulsory  health 
insurance,  87 

Altmeyer,  A.  J.,  on  health  insurance  in 
U.  S.,  94,  101,  102 

Amateurs  responsible  for  health  insurance 
propaganda,  184 

Amebic  Dysentery,  special  report  on,  in 
England,  162 

Amendments,  National  Health  Insurance 
Act,  1918,  75,  106,  144 

American  Association  for  Labor  Legisla- 
tion, propaganda  of,  6,  8,  32,  33,  66,  92, 
101-104,  129,  130,  186 

American  Child  Hygiene  Association,  59 

American  IJnig  Manufacturers'  Association 
opposed  to  health  insurance,  66 

American  Economic  Association  and  health 
insurance.  15 

American  Medical  Association,  resolution 
opposed  to  compulsory  health  insurance, 
66 

American  opinion  on  social  insurance,  14, 15 

American  professors  and  health  insurance. 
6 

American  Public  Health  Association,  59 

American  Sociological  Society  and  health 
insurance,  15 

Anesthetics  not  provided  fur,  in  England. 
150 

Anglo-Saxon  freedom  vs.  German  paternal- 
ism, 134 

Anglo-Saxon  superiority,  182 

Annual  Keports  favored  by  Connecticut 
Commission,  92 

Appendicitis,  industries  not  responsible  for. 
131 

Appliances,  lack  of  proper,  in  health  insur- 
ance, Eng.,  154 

Approved  Societies,  autocracy  of,  140;  fi- 
nance investigations  of,  142;  possible  in- 
solvency of,  167;  valuation  of,  postponed, 
138,  139 

"Army  Anthropometry  and  Medical  Rejec- 
tion Statistics,"  54 

Army  rejections,  53,  .54 

Astor,  Major  Waldorf,  on  health  insurance, 
Eng.,  138,  146 

Atkins,  David,  opposed  to  compulsory  health 
insurance,  50 


Australia,  no  compulsory  health  insurance 

in,  113 
Autocracy,    favored    by    social    insurance, 

181 ;  and  German  social  insurance,  186 
.\yreshire  County  Insurance  Committee  on 

insured  persons'  disabilities,  40 

Balfour,  Lord,  on  pauperizing  results  of 
National  Health  Insurance,  58 

Baltimore,  report  on  poverty  in,  21 

Bankruptcy,  possibility  of,  health  insurance 
carriers,  Eng.,  138,  139,  140;  German 
state  institutions,  135 

Behaviour  during  sickness  regulations,  Eng., 
73 

Belgian  State  subsidies,  not  compulsory 
health  insurance,  71 

Belgium,  voluntary  health  insurance  sys- 
tem, 113 

Benefit  associations,  115 

Benevolent  fund,  National  Health  Insur- 
ance, 146 

Beye,  William,  Illinois  Health  Insurance 
Commission,  114 

Bias  of  Ohio  Commission's  report,  94,  9.'>, 
96,  100,  103,  104,  117.  126.  127;  of  Cali- 
fornia Commission,  111,  117,  126,  127,  129 

Block  studies  and  sickness,  Chicago.  118 

Blue,  Surgeon-General,  and  health  insur- 
ance, 83 

Boston,  sickness  survey  of,  36 

Boynton,  Hon.  Albert  E.,  California,  70 

Brend,  Dr.  W.  A.,  on  British  health  insur- 
ance, 58,  59,  103,  108,  177-180,  183.  184; 
and  drug  trade,  68;  and  medical  attend- 
ance, 87;  and  medical  trcalnicnl.  155;  on 
panel  practice.  151;  on  principle  of  sick- 
ness benefit,  120;  on  sickness  rates  and 
reports,  Eng.,  163,  164 

"Brief,"  the,  for  health  insurance,  8 

British  Industrial  ins.,  growth  of,  102,  126 

British  .Medical  .Association  on  compulsory 
licallh  insurance,  108 

British  Medical  Journal  on  private  vs.  panel 
practice,  72 

British  medical  profession,  views  of,  143-1  tK 

British  National  Health  Insurance  Act.  di- 
gest of,  by  (.alifornia  Commission,  106 

Budgets,  family.  Illinois  and  New  York  in- 
vestigations. 123.  124 

Building  Trades  Accident  .\ssociation,  Ger- 
many. 135 

Bureaucracy  favored  by  compulsory  health 
insurance.  76,  77;  built  up  by  health  in- 
surance. 184;  of  health  insurance.  Eng- 
land, 138 


191 


I?iircaii    of    Associated    Charities,    Newark, 

slatistics  of,  54 
Ihiiiis,  Ivsilier  ll«;l('n,  on  licaltli  and  sanitary 

laws,  Ohio,  9\ 

Califohnia,  first  report  of  Social  Insurance 
(iommispion,  11-34;  partiality  and  bias  of, 
9,  11,  12,  25;  work  of  a  paid  Eastern  in- 
vestigator. 9,  12,  25,  32 

California,  defeat  of  Constitutional  Amend- 
ment, 34,  60,  101,  186 

California,  second  report  of  Social  Insur- 
ance Connnission,  105 

California  wage-earners  not  in  need  of  com- 
pulsory health  insurance,  71 

Canada,  no  compulsory  health  insurance 
in,  113 

Cancer,  American  Society  for  Control  of, 
59 

Capitation  fee,  probable  increase  of,  Eng- 
land, 73 

Capitation  system,  England,  109,  153 

Carriers  of  social  health  insurance,  98 

Cash  benefit,  liberality  of  Ohio  Commis- 
sion, 100 

Cash  surrender  and  paid-up  values  lacking 
in  compulsory  health  insurance,  46 

Casual-labor  element,  not  reached  effectively 
by  compulsory  health  insurance,  56,  107, 
141 

Cerebro-spinal  fever  epidemic,  special  re- 
port on,  England,  162 

Charity  needs,  not  materially  affected  by 
health  insurance,  50,  122 

Chicago  municipal  tuberculosis  sanatorium, 
32,  125 

Chicago,  poverty  and  sickness  in,  124 

Chicago  school  children,  examination  of, 
118 

Chicago  survey  of  sickness  conditions,  118 

Child  hygiene  in  the  United  States,  126 

Child  vitality,  Ohio,  95 

Child  Welfare,  Committee  on,  59 

Civil  servants,  English,  high  quality  of,  77 

Class  distinctions  favored  by  social  insur- 
ance, 60,  109,  128,  131,  180,  182,  185 

Clay,  Sir  Arthur,  on  Democracy,  73,  74 

Clinics,  consulting,  not  provided  in  Eng- 
land, 150 

Clinics,  free,  need  for  extension  of,  65 

Coal  miners,  health  insurance  for,  in  Ohio. 
94 

Collection  of  contributions,  not  always  easy 
in  England,  79 

Collective  bargaining,  medical  profession 
and, 31 

Collie,  Sir  John,  on  malingering,  51,  65,  137 

Commons,  John  R.,  Prof.,  on  health  insur- 
ance, in  United  States,  94,  101,  102;  false 
theories  of  wealth,  86 


Commonwealth  Club  of  California,  first  re- 
port of,  42-53;  second  report,  70-79;  vote 
on  health  insurance,  112 

Communal  Sick  Fund  of  Leipzig,  6,  7,  43 

Compensation  of  doctors,  in  England,  107, 
152,  153;  in  Germany,  153 

Complexities,  National  Health  Insurance, 
75,  137,  142,  143,  158,  160 

Compulsion,  leads  to  inquisition,  73;  un- 
American,  67;  wrong  in  principle,  103; 
an  unsound  principle,  185 

Compulsory  health  insurance,  likely  to  hin- 
der health  progress,  14;  not  a  disease 
preventive,  22;  un-American,  5;  un-demo- 
cratic,  19 

Compulsory  vs.  voluntary  insurance,  106 

Compulsory  vs.  voluntary  medical  attend- 
ance, 144 

Connecticut  Commission  on  Public  Wel- 
fare, report  of,  87-93 

Connecticut  Dept.  of  Labor,  confirms  find- 
ings of  Connecticut  Commission,  92,  93 

Connecticut  Insurance  Commission's  report, 
scientific  quality  of,  128 

Consolidated  report,  on  English  Health  In- 
surance, 138,  139,  140,  142 

Constitutional  Amendment,  California,  34, 
105,  111,  112,  186 

Constitutional  Amendment,  Massachusetts, 
defeated,  62,  63 

Contributions  for  health  insurance  not 
always  easily  collected,  79 

Co-operation,  Illinois  Health  Insurance 
Commission  with  State  Departments,  114 

Cost  of  compulsory  health  insurance  in- 
calculable, 88;  conjectural,  90,  184;  in 
California,  28-31,  42,  45,  72,  75,  108;  in 
Germany,  71;  in  England,  138,  139;  esti- 
mated for  Massachusetts,  New  York  and 
Connecticut,  90,  91;  Ohio,  99,  103;  Wis- 
consin, 82 

Cost  of  medical  care  within  means  of  Amer- 
ican wage-earners,  65 

Cost  of  sickness  in  California,  45;  Cali- 
fornia and  Pacific  coast,  17;  estimate  by 
Illinois  Commission,  121;  Massachusetts 
Commission,  38,  39,  40 

Cost  of  sickness  and  poverty,  115 

Cost  of  special  medical  service,  20 

Cost  of  State  Commissions'  social  insurance 
investigations,  41 

Credit  function,  importance  of,  in  time  of 
sickness,  122 

Crowder,  Major-General,  on  Army  rejec- 
tions, 54 

Dangers  of  Democracy,  the,  by  Thomas 
Mackay,  73 

Death  rate,  California,  30;  of  U.  S.,  excep- 
tionally favorable  in  recent  years,  53;  low 
in  U.  S.,  1919,  131 


192 


rJeath  and   sickness  rates   lower   in   H.   S. 

than  in  Germany  or  England,  57 
Deficits  of   family  budgets   on   account   of 

sickness,  122-124 
Democracy  in  social  insurance,  a  delusion, 

73,98 
Demolins,  1VI.  Edmund,  on  socialism,  182 
Dental  care,  estimate  of  cost,  California,  29 
Dental  clinics,  California,  108 
Deposit  contributors,  Eng.,  49,  140,  152 
Destitution  in  California,  exaggeration  of. 

11,  23 
Deterioration,  physical,  Germany,  186 
Devine,  Edward  T.,  "Will  California  Lead?" 

33,  111,  112 
Diabetes,  industries  not  responsible  for,  131 
Diagnosis  under  panel  practice  unsatisfac- 
tory, 110 
Diagnostic  centers  proposed  for  California, 

108 
Dicey,  Prof.  A.  V.,  on  Old  Age  Pension 
Act,  51,   60;    on   "Law   and   Opinion   in 
England,"  144 
Disability  insurance,  study  of,  115 
Disadvantages  of  compulsory  healtii  insur- 
ance, 87,  88 
Disease  prevention  hindered  by  social  in- 
surance, 88,  89;  not  considered  by  Cali- 
fornia Commission,  31  > 
Dispensaries,   need   for   extension   of   free, 

65,  66 
Dock  labor  and  English  health  insurance, 

107 
Domiciliary  attendance,  Eng.,  149,  155 
Druggists,  opposed  to  health  insurance,  66 
Drug  practice,  health  insurance,  Eng.,  160. 

161 
Drug  Pricing  Bureau,  Eng.,  160,  161 
Drug  Tariff,  Eng.,  142,  159 
Dunlop,    George    A.,    California,    minority 

views  of.  109 
Duration  of  treatment,  panel  practice,  110 
Dust,  industrial,  an  occupational  hazard,  55 

Earning  power  of  American  wage-workers, 
15 

Economic  condition,  Germany,  lowered  by 
social  insurance,  188 

Economic  dependence  removable  by  other 
means  than  compulsory  health  insurance, 
57 

Economic  relief,  fundamental  principle  of 
compulsory  health  insurance,  112 

Economic  status  of  wage-earners,  Wiscon- 
sin, 81 

Economists,  American,  with  German  train- 
ing, for  social  insurance,  184 

Employers,  Connecticut,  opposed  to  com- 
pulsory health  insurance,  89 

Employers  not  responsible  for  employees' 
health,  58 


England's  experience  not  a  safe  guide,  89 

Epidemics  not  prevented  by  health  insur- 
ance, 111 

European  in«urance  experience  not  compar- 
able with  that  of  California,  25,  34 

European  practices  varied  as  regards  healtii 
insurance,  71 

Expenditures  for  medical  and  dental  care. 
California.  18.  19 

Expenditures,  California  Commission,  re- 
fusal to  honor,  105 

Expenses  of  health  insurance,  England,  78 

Expositions,  International.  German  propa- 
ganda at.  189 

Fabian  .Socjetv.  report  on  health  insurance. 
98.  107,  108,  no.  139 

Failure  of  German  compulsory  health  insur- 
ance. 47.  132.  134.  181.  190 

Family  income  statistics,  Massachusetts.  35 

Fees,  medical,  not  excessive  in  California. 
17.  18;  in  Massachusetts.  65 

F^ee  system,  health  insurance,  109 

Fenner's  Southern  Medical  reports,  quota- 
tion from.  17 

Finances  of  English  an(J  German  systems, 
chaotic.  184 

Fisher,  Prof.  Irving,  on  lapses  under  com- 
pulsory health  insurance.  46 

Foley.  Edna  L..  Illinois  Health  Insurance 
Commission.  114 

Framingham  experience.  117 

France,  compulsory  health  insurancp  for 
miners  only.  113;  sickness  ins.  in.  45 

Fraternal  health  insurance.  68.  69 

Fraternal  organizations,  opposition  of.  1.35; 
and  sick  benefits.  Massachtisctt-:.  .38.  .39; 
and  trade  unions  insurance.  Wisconsin. 
82:  possible  insolvency  of,  Eng.,  143; 
sickness  experience,  California.  25:  sick- 
ness insurance  methods,  Massachusetts.  40 

Fraud,  in  compulsory  health  insurance.  .58, 
77.  78 

Frayne.  Hugh,  opposed  to  compulsory  health 
insurance,  89 

Free  clinic  or  dispensary  system.  Calif.,  20 

French  insurance  ami  (irnsinn  subsidies,  not 
compulsory  healtii  itisnrancc.  71 

Friendly  .Societies  of  England,  adversely  af- 
fected bv  compulsory  henltli  insurance. 
74:   possible  insolvency  of.  England,  I'W 

Funeral  benefit,  California,  .30.  108 

Gforcf,,  Llovd.  followed  German  evaniplr, 
8.  76.  1.32.  178.  179 

German  character,  bad  effect  of  social  in- 
surance on,  76 

German  compulsory  insurance,  defeats  of. 
43;  failure  of.  47.  48.  61.  65.  181-190 

German  insurance  ex|)crience  to  1914.  140 

German  Government's  fatuous  policy,  183 


193 


Crrman  industrial  insurance,  growth  of, 
102,  126 

German  niollidds,  disastrous,  187 

(rorman  orinin  of  health  insuranre,  5-8,  76, 
132,  178,  179 

(lerman  propaganda.  International  Exposi- 
tions, 189 

German  sanatorium  treatment  of  the  tuber- 
culous, 32,  125 

German  System,  a  failure,  133-135;  bureau- 
cratic, 133 

German  vs.  English  system,  prolongation  of 
sickness,  100 

Germany,  struggle  of  doctors  for  proper 
compensation,  153 

Gompers,  Samuel,  opposition  of,  64,  89,  130, 
186 

Gould,  Dr.  George  M.,  on  the  cost  of  illness 
and  death,  130 

Government,  American,  one  of  law  not  of 
men,  5 

Government  insurance  not  real  insurance, 
132 

Governors'  messages  urging  health  insur- 
ance, 9 

Grammar  of  Science,  quotation  from,  129 

Grant-in-Aid  for  nursing  provision,  Eng.. 
158 

Grants-in-Aid.  poor  relief  disguised,  Eng.. 
138 

Great  Britain,  National  Health  Insurance 
in,  137-180 

Group  life  insurance,  81,  115 

Hackney  District,  London,  report  on  sani- 
tary conditions.  164 

Hadley,  President  A.  T.,  oppo.sed  to  compul- 
sory health  insurance.  43,  185 

Hamilton,  Dr.  Alice,  member  of  Illinois 
Health  Insurance  Commission,  114,  116. 
127 

Hammond,  M.  B.,  on  old  age  pensions.  94 

Hampshire  County,  report  of  medical  officer, 
on  results  of  health  insurance,  England, 
167 

Harris,  Henry  J.,  on  sickness  insurance  in 
Germany,  94 

Harris.  Dr.  Louis  I.,  report  on  household 
conditions.  New  York  families,  123 

Hat-making  industry,  hazards  of,  54,  55 

Hayhurst,  Dr.  Emery  R..  on  health  insur- 
ance of  Ohio  coal  miners,  94 

Health,  misuse  of  term,  60 

Health  administration,  local,  methods  of 
strengthening,  131;  a  Government  func- 
tion, 86 

Health  and  the  State,  bv  Dr.  William  A. 
Brend  (see  also  Brend).  58,  59 

Health  of  Munition  Workers  Committee, 
final  report  of,  Eng..  170,  171 

Health  agencies,  need  of  extension  of,  in 
Massachusetts,  66 


Health  conditions,  favorable  in  New  Jersey, 
.54;  better  in  United  States  than  in  Ger- 
many or  England,  57;  local,  unsatisfac- 
tory in  Illinois,  124,  125;  England  and 
Wales,  141 

Health  departments.  State  and  National,  in- 
efficiency of,  97 

Health  measures  better  than  compulsory 
health  insurance,  84 

Health  not  improved  by  health  insurance, 
13,  14,  46,  184 

Health  insurance  vs.  workmen's  compensa- 
tion, 45,  83 

Health  insurance  bills.  United  States,  not 
drawn  by  experts,  8,  133 

Health  insurance,  amount  of,  in  Massachu- 
setts, 36 

Health  insurance  movement  in  United 
States,  Commons  and  Altmeyer,  94,  101. 
102 

Healthfulness  of  United  States,  53 

Health  Legislation,  inadequate,  124 

Health  progress  in  England,  previous  to  Na- 
tional Health  Insurance,  59;  under  health 
insurance,  162 

Hoffman,  Frederick  L..  address  on  German 
Failure.  181-190;  references  to  publica- 
tions of,  17,  43.  47.  65,  78,  132,  134,  140 

Hospital  associations,  development  of.  24 

Hospital  cost,  under  sickness  insurance,  29 

Hospital  facilities,  inadequacy  of.  in  Cali- 
fornia, 23,  48 ;  importance  of.  126 

Hospital  treatment,  California.  108 

Hospitals  and  sanatoria,  need  for  more  and 
better.  Wisconsin.  85 

Hours  of  labor  and  wages  vs.  compulsory 
health  insurance.  50,  51 

Household  conditions,  Ne\v  York  families. 
123 

Housing,  better,  as  part  of  a  constructive 
program,  Wisconsin.  85 

Housing  conditions  and  sickness,  124 

Housing  and  tuberculosis.  Nottingham. 
Eng.,  165 

Housing  conditions  not  improved  by  health 
insurance.  163 

Housing  and  wages  vs.  health  insurance,  155 

Hurrv,  J.  B..  poverty  and  its  vicious  circles. 
121 

Hutchinson.  Dr.  Woods,  discussion  of  health 
insurance.  107.  109.  110.  Ill 

Howe.  Frederic  C.  on  German  economic 
conditions.  13 j  on  social  insurance  in 
Germany.  44 

Hygiene,  education  in,  need  for.  66 

Income,  percentage  of,  spent  for  medical 
and  dental  fees.  California,  18.  19 

Illinois,  economic  cost  of  sickness  in,  121, 
122:  preliminary  report.  Health  Insur- 
ance Commission,  114-128 


194 


Imperial  Cliancellor  of  Germany  on  social 
insurance  propaganda,  186 

Independent  Order  of  Odd  Fellows,  sickness 
experience  of,  28 

Individualism,  discouraged  by  compulsory 
health  insurance,  50,  68,  190 

Industrial  accident  insurance,  Gennany,  18<J 

Industrial  conditions  good  in  Massachu- 
setts, 63 

Industrial  diseases,  should  be  included  in 
Workmen's  Compensation,  45;  prevention 
of,  173 

Industrial  dust,  an  occupational  hazard,  o' 

Industrial  insurance,  errors  regarding,  68; 
statistics,  wrongful  use  of,  95;  investi- 
gated by  California  Commission,  105; 
and  compulsory  healtli  insurance,  102. 
115,  126;  in  force  in  United  Kingdom. 
1911-1916,  136;  in  force  in  Germany. 
1892-1917,  136;  and  National  Health  In 
surance,  140 

Industry,  Germany,  burdens  upon,  189 

Infant  mortality  reduction,  Wisconsin,  85; 
undiminished  in  Kngland,  141;  special 
report  on,  Eng..  162 

Infant  welfare  work,  125,  126 

Influenza,  not  prevented  by  health  insur- 
ance, 111 

Initiative  and  self-dependence  opposed  to 
compulsory  health  insurance,  50,  68,  190 

Insolvency,  danger  of,  in  England,  140,  167 

Institutional  costs  not  decreased  by  com 
pulsory  health  insurance,  49 

Institutional  treatment,  tuberculosis  and. 
Eng.,  1.56 

Instructive  District  Nursing  Associations, 
sickness  data,  Boston,  36 

Insurance,  misuse  of  term,  6,  60,  76;  for 
wage-earners,  Massachusetts,  35,  36,  39; 
real,  different  in  principle  from  compul- 
sory insurance,  18;  rai)id  increase  in 
voluntary,  Massachusetts.  64;  not  prima- 
rily for  preventive  purposes,  86 

Insurance  Advocate,  "Public  Pays  the  Bill." 
133 

Insurance  companies,  opposition  of,  135 

Insurance  supervision,  need  for  better,  in 
Wisconsin,  85 

International  Assorialion  for  I.alior  I^cgisla- 
tion,  5,  67 

Invalidity  pensions,  Germany,  134 

Investigation  of  German  results,  superficial. 
7;  of  California  Social  Insurance  Com- 
mission, superficial,  12,  25 

Investments,  National  Health  Insurance 
fund, 142 

Investments,  war.  a  menace  to  German  .So- 
cial Insurance,  188,  189 

Irish  family  budgets.  New  York,  123 

Italian  family  budgets,  New  York,  123 

Jewish  family  budgets.  New  York.  123 


Jones  and  Llewellyn  on  malingering,  65,  176 
Justice,  social,  opposetl  lo  social  insurance, 
185,  189 

Labok,  organized,  and  compulsory  health  in- 
surance, 82,  83 

Labor  element,  Massachusetts,  opposed  t" 
compulsion,  63,  64 

Labor  leaders,  opposition  of,  1.30 

I.abor  organizations,  national,  opposed  to 
compulsory  iicalth  insurance,  89 

Labor  troubles  not  prevented  by  social  in 
surance,  132 

I^bor-time  loss,  increased  by  social  insur- 
ance, 88 

Labor  turnover  not  reduced  by  compulsory 
health  insurance,  88 

Labor  unions  and  sick  benefits,  Massachu- 
setts, 38,  39 

Labor  unions,  opposition  of.  1.35 

Lapses,  under  compulsory  health  insurance, 
46 

"Law  and  Opinion  in  England,"  bv  Prof. 
A.  V.  Dicey,  51 

Law,  Roman  vs.  English,  5 

Lead  poisoning  infrequent  in  New  Jersey,  54 

Lee,  Robert  E.,  opposed  to  compulsory 
health  insurance,  Ohio,  102,  103 

Leipzig  and  California,  tuberculosis  esti- 
mates. 32 

Leipzig  Communal  Sick  Fund,  reference  to. 
6,  7,  43,  47,  48,  172;  increase  in  medical 
fees  of,  31;  malingering  experience  of, 
17;  unemployment  and  insurance  in,  16 

Liberty,  abridgement  of  personal,  Eng.. 
142,  143 

Life  insurance,  basis  of,  19;  practice  as  re- 
gards felt-hat  makers.  55;  study  of,  115 

Literature  of  "social  insurance,"  6 

Local  health  work,  Illinois,  124,  125 

Logan,  Dr.,  on  early  medical  fee  bills  in 
California,  17 

Ivongevity  not  increased  by  health  insurance. 
13,  14;  comparative,  130 

Longshoremen,  insurance  of.  105 

Losses,  payment  of,  primary  purpose  of  in 
surance,  86 

Lumber  companies  of  (iaiifornia,  provisions 
for  sick  employees,  24 

Lumbermen,  insurance  of,  105 

McCai.l,  Governor,  error  in  inaugural  of. 
1917,  68 

MacKay.  Thomas,  The  Dangers  of  Democ- 
racy, 73;  on  the  English  jjoor,  143 

McVey.  Frank  L.,  on  social  insurance,  187 

Malingering.  51.  .52.  77.  78.  88.  110.  17.5. 
176;  England.  6.5.  67.  119.  1.37.  149;  Ger- 
many. 17.  48,  72.  189 

Mason.  Harry  M..  im  views  of  pharmacist*. 
Massachusetts.  67 


195 


Massatliiisclls  Special  Commission,  first 
report,  9,  35,  42;  dissenting  views,  37 

Massachusetts  Special  Commission,  secoml 
report,  62-69 

Massachusetts,  estimated  cost  of  health  in- 
surance for,  90 

Maternity  benefit,  125,  126;  California,  30, 
108;  Great  Britain,  99,  167-168 

Maternity  care,  importance  of,  22 

Medical    administration,    National    Health  • 
Insurance,  Kng.,  143 

Medical  aid,  estimate  of  cost,  California,  29 

Medical  attendance,  poor  quality  of.  Great 
Britain,  87;  unsatisfactory,  Germany,  183 

Medical  benefits,  uniform,  109;  inadequate, 
146 

Medical  care.  Great  Britain,  inadequate, 
100;  among  very  poor,  Boston,  36,  37; 
fundamental  element  in  health  insurance, 
144 

Medical  fees,  early,  in  California,  17;  mini- 
mum, in  California,  18;  increase  of,  under 
health  insurance,  31 ;  not  excessive  in 
Massachusetts,  65;  low  in  Germany,  183 

Medical  needs  not  fully  met,  Eng.,  149 

Medical  Officer  of  Health,  Rochdale,  Eng., 
on  health  insurance,  141 

Medical  practice,  need  of  reorganization  of, 
20,21 

Medical  profession,  generally  opposed  to 
compulsory  health  insurance,  60;  stand- 
ards lowered  under  compulsory  health  in- 
surance, 61;  England,  servile  position  of. 
74;  Connecticut,  opposed  to  compulsory 
health  insurance,  89;  decline  of,  in  Eng., 
143;  American,  opposition  of,  186;  stand- 
ards lowered  in  Germany,  183 

Medical  progress  not  furthered  by  health  in- 
surance, 154 

Medical  referees,  52,  110 

Medical  service,  estimate  of  cost  of,  in  Cali- 
fornia, 30,  31 

Medical  supervision,  124 

Medical  treatment,  cost  of,  in  California,  42: 
unsatisfactory  under  compulsory  health 
insurance,  58;  costly  and  unsatisfactory, 
England,  137;  unsatisfactory  under  Na- 
tional Health  Insurance,  179 

Mercurial  poisoning  infrequent  in  New  Jer- 
sey, 54,  55 

Metropolitan  Life  Insurance  Company's 
sickness  surveys,  117;  sickness  survey, 
Boston,  36 

Milk,  special  report  on,  Eng.,  162 

Miller,  Gurdon  R.,  on  social  insurance,  129. 
132,  187 

Millis,  Dr.  H.  A.,  Executive  Secretary,  Illi- 
nois Health  Insurance  Commission,  114. 
126 

Ministry  of  Health,  Eng.,  161,  177 

Minor  ailments  and  health  insurance,  78. 
110 


Minority  Report,  Illinois  Commission,  116, 

127,  128 
Modern  Medicine  on  sick-time  loss,  39 
Moldenhauer,   Prof.   P.,  on  German   social 

insurance,  134,  135 
Money,  Chiozza,  on  "Insurance  versus  Po- 
verty," 8,  76,  179 
Mongan,  Dr.  Charles  E.,  opposed  to  health 

insurance,  66 
Monrovia,  Calif.,  high  tuberculosis  rate  of, 

22 
Morality  in  Germany,  189 
Morbidity  rate,  German  sick  funds,  134 
Mortality,  Connecticut,  favorable,  91,  92 
Mortality  not  reduced  by  social  insurance, 

130 
Mortality  and  morbidity  experience,  Leip- 
zig Communal  Sick  Fund,  6,  7,  43 
Mortality  rates,  increase  of,  in  Germany,  186 
Mothers'  pensions  favored  by  Connecticut 

Commission,  91 
Mullen,  James  W.,  opposed  to  compulsory 

health  insurance,  47 
Munich   Communal   sick   fund   experience, 

186 
Munitions,   Ministry   of,   excellent   reports, 

161,  162 
Munition  workers  not  benefited  by  health 

insurance,  Eng.,  172 
Murphy,  Daniel  C,  opposed  to  compulsory 

health  insurance,  46 
Museum  of  Safety,  New  Jersey,  56 
Mutual  benefit  associations,  examination  of, 

Illinois,  119 

National  Association  of  Druggists,  opposi- 
tion to  health  insurance,  66 

National  Civic  Federation,  opposed  to 
health  insurance,  103 

National  Debt,  Commissioners  of  the,  and 
health  insurance  fund,  142 

National  Health  Insurance,  Great  Britain, 
137-180;  Amendment  Act,  1918,  144; 
sickness  experience,  Eng.,  40;  and  Poor 
Law  practice,  Eng.,  73;  complexities  of, 
75,  137,  142,  143,  158,  160;  Dr.  Brend  on. 
58,  59,  68,  87.  103,  108,  120,  151,  163, 
164,  177-180,  183,  184 

National  Insurance  Act,  Eng.,  not  a  safe 
guide,  89 

National  Safety  Council,  72 

Navy  rejections,  54 

Nervous  diseases,  increase  of,  in  Germany. 
186 

New  Bedford,  Mass.,  reduction  of  tuberculo- 
sis in,  66 

New  Jersey  Commission  on  Old  Age  Insur- 
ance and  Pensions,  report  of,  53-61 

New  Jersey  Museum  of  Safety,  Jersey  Citv. 
56 

New  Jersey  State  Department  of  Labor, 
good  preventive  work  of,  55.  56 


196 


Newsholme,  Sir  Arthur,  on  Ministry  of 
Health,  161 

New  Statesman  on  Health  Insurance,  129, 
138,  139,  140 

New  York,  estimated  cost  of  health  insur- 
ance for,  90 

Non-resident  mortality  from  "tuberculosis  in 
California,  22,  23  * 

Northamptonshire,  report  on  tuberculosis 
and  Health  Insurance  Act,  165-167 

Nursing,  lack  of  skilled,  under  health  in- 
surance, Eng.,  158 

Nursing  centers,  district,  as  part  of  a  con- 
structive program,  Wisconsin,  84,  85 

Nursing  service,  lack  of  proper,  Eng.,  155 

Oakland,  work-time  loss  in,  on  account  of 
sickness,  15,  16 

Occupational  Disease  Clinic,  Newark,  56 

Occupational  diseases,  should  be  included 
in  Workmen's  Compensation,  45;  em- 
ployers responsible  for,  83;  now  included 
in  Wisconsin  Workmen's  Compensation, 
85;  in  New  Jersey,  54;  in  Connecticut, 
92;  decrease  in,  101;  as  a  cause  of  inca- 
pacity, 115,  172,  173 

Odd-job  men  and  English  health  insurance, 
107 

O'Crady,  Dr.  John,  on  old-age  pensions  and 
insurance,  94 

Ohio,  Report  of  Health  and  Old  Age  In- 
surance Commission,  94;  no  demand  in, 
for  health  insurance,  102 

Old-age  insurance  and  pensions,  94 

Old-age  pensions,  opposed  by  Connecticut 
Commission,  91;  in  Great  Britain,  94 

Old-age  Pension  Act  (Eng.),  Prof.  Dicey 
on,  60 

Old-age  pensions  vs.  poor  relief,  12,  13,  48, 
49,  51 

Opposition  to  compulsory  health  insurance, 
Massachusetts,  62,  63 

Origin  of  compulsory  health  insurance,  5-8, 
76,  132,  178,  179 

Outworkers  in  Ireland  and  health  insurance, 
142 

Over-insurance,  175 

Paid-up  and  cash  surrender  values  lacking 

in  compulsory  health  insurance,  46 
Panel  Committee,   London   County,  memo- 
randum on  disease  prevention,  169,  170 
Panel  lists,  limitation  of,  151 
Panel  physicians,  helplessness  of,  108 
Panel  practice,  unsatisfactory,  72,  110;  Dr. 

Pratt  on,  152 
Panel  system,  dissatisfaction  with,  .58,  .59: 
imperfections  in,  147.  148;  objections  U>. 
150-152;   commercialism  of,  180;   failure 
of,  in  Germany,  183 


Parliamentary  grants  for  health  insurance. 

Eng.,  147 
Paternalism,  fostered  by  compulsory  healili 
insurance,   68;    failure   of,   in   Germany. 
182;    favored   by   compulsory   insurance, 
189 
Patriotism  and  German  ideas,  134 
Pauperism,     encouraged     by     compulsory 
health  insurance,  51,  57,  58;  not  solved  by 
compulsory  health  insurance,  48,  49;  not 
removed  by  health  insurance,  76,  77;  ri-k 
of,  through  sickness,  122 
Payment   of   physicians,   in    England,    107. 

152,  153;  in  Germany,  153 
Pearson,  Karl,  on  impersonal  judgment,  12'' 
Personal  rights  violated  under  compulsorv 

health  insurance,  52 
Pharmacists,  opposed   to  health  insurance. 

66 
Physical  examinations,  124;  and  construc- 
tive health  work,  84;  a  preventive  of  in- 
dustrial disease,   173;   and  health   insur- 
ance, 131 
Physical  progress  retarded  under  social  in- 
surance, 188 
Physicians,  ratio  of,  to  population,  97 
Pillsbury,  Warren  H..  in  favor  of  health  in- 
surance, 47 
Politicians,    framers    of    Health    Insurance 

Act,  176 
Poor,   poorest,   not   covered    by   health   in- 
surance, 37.  38.  ,56,  71,  73.  11)6.  148,  167 
Poor  Law  vs.  health  insurance.  146 
Poor  Law,  old,  F^nj:.,  143 
Poor   law   medical    support    not    abolished, 

Eng.,  148.  119 
Poor    law    and     health     insurance.    Great 

Britain,  73,  76 
Poor  law  and  health   insurance,  Germany. 

59 
Poor  laws,  report  of.  Commissioners  on,  143 
Poor  relief  not  reduced  by  social  insurance. 
12,   77;    and   old-age   pensions,   England, 
48,  49,  51;  under  name  of  insurance.  IM; 
and  compulsory  health  insurance,  182 
Poverty,  extent  of,  in  California.  12;  in  Ger- 
many,  13;   in   Massachusetts.  3.5;   causes 
of,  21,  37;  not  abolished  by  health  insur- 
ance, 48,  49;   not   reached   by  health   in- 
surance, 66;  result ing  from  sickness,  13.3; 
not  main  cause  of  ill  health.  178 
Pratt,  Dr.  E.  F.,  on  panel  practice,  151.  152 
Premiums  and  claim   iiaymenls.   Industrial 

insurance  companies,  68 
Premiums,    compulsory    health     insurance, 

California,  106 
President,   I.eland   Stanford   I'niversily.  on 

social  insurance,  187 
Preventive  medicine,  the  great  need  for,  21 
Preventive  work  of  private  insurance  rorn- 
panies.  69 


197 


I'revenlion,  disease,  and  lieallli  insurance, 
72,  81,  88,  89,  112,  129;  not  accomplished 
by  health  insurance,  Eng.,  141,  169,  170; 
hindered  ratijer  than  helped  by  health  in- 
surance, 175;  secondary  object  of  insur- 
ance, 86 

Pricing  Bureau,  Drug,  Eng.,  160,  161 

Progress,  social,  retarded  in  Germany,  189 

I'ropaganda  for  compulsory  health  insur- 
ance, origin  and  character  of,  8,  134;  kind 
and  spirit  of,  California,  77;  German,  for 
health  insurance,  183,184,186;  California 
and  Ohio  Commission,  126,  127;  German, 
proposed  for  peace  conference,  186 

Proof  of  sickness,  Germany  and  United 
States,  119 

Prussia,  longevity  in,  130 

Public  health,  a  science,  183 

Public  health  administration  not  coordi- 
nated with  health  insurance,  169;  not 
coordinated  in  England  or  Germany,  59 

Public  health  not  benefited  by  health  insur- 
ance, 141,  179 

Public  health  nursing,  importance  of,  126 

Public  health  organizations,  United  States, 
59 

Ransom,  John  E.,  116,  127 

Restrictions,  National  Health  Insurance,  140 

"Reasons  for  Standards,"  California,  106 

Recommendations  of  Connecticut  State 
Department  of  Labor,  92,  93 

Reform,  health  and  sanitary,  obtainable 
without  health  insurance,  174 

Registrar-General,  Eng.,  reports  on  mortal- 
ity, 141 

Rejection  rate,  Army  and  Navy,  53,  54 

Reports,  annual,  discontinued  by  National 
Health  Insurance,  137 

Reserve  of  Industrial  insurance  companies, 
68 

Rhodian  Sea  Laws,  181 

Riverside-workers,  and  English  health  in- 
surance. 107 

Roberts,  Frederick,  M.  P.,  on  tuberculosis. 
156 

Rochdale,  Eng.,  experience  with  health  in- 
surance, 141 

Ross,  Peter  V.,  on  propaganda  for  health 
insurance  in  California,  77 

Rowell,  Chester  H.,  argument  for  compul- 
sorv  health  insurance  for  California,  43, 
44,  45,  75,  77-79 

Ro\vntree,  B.  Seebohm  on  "The  Human 
Needs  of  Labour,"  121 

Royal  Sanitary  Institute,  an  aid  to  local 
health  progress  in  England,  59 

Rural  communities,  diseased  children  in,  118 

"Safety-First"  and  Workmen's  Compensa- 
tion, 72,  129;  not  promoted  by  health  in- 
surance, 13 


Safety  Institute  of  America  antedates  Work- 
men's Compensation,  72 

Salter,  Dr.  Alfred,  on  panel  practice,  59 

Salz,  Ansley  K.,  arguments  for  health  in- 
surance, 42,  70-73 

Sanatoria  provision,  Illinois,  125 

Sanatorium  benefit  unsatisfactory,  Eng., 
157,  166,  167 

San  Francisco,  work-time  loss  in,  on  account 
of  sickness,  15,  16 

.Sanitary  reform,  a  duty  of  the  Government, 
86 

Sanitation  not  improved  under  social  health 
insurance,  46,  71,  130 

Sanitary  provisions  inadequate,  Eng.,  156 

Sanitary  reform  checked  by  social  insur- 
ance, 188 

Santa  Fe  Hospital  Association,  24 

Savings  habits,  better  than  paternal  care,  84 

Science  in  medicine  discouraged  by  health 
insurance,  74 

Scientific  character,  Illinois  Commission's 
report,  116,  117,  128 

Scientific  work,  Research  Committee,  Eng., 
161 

Scotia  Hospital  Association,  24 

Scott,  George  B.,  on  compulsory  health  in- 
surance, 45,  46 

Scottish  Legal  Health  Assurance  Society, 
letter  of,  48,  49 

Seasonable  labor,  California,  105 

Seligman,  Prof.  E.  R.  A.,  health  not  wealth, 
86 

Sick  benefit  claims,  report  of  Committee  on, 
175 

Sick  benefits  paid  by  existing  organizations, 
Massachusetts,  38,  39 

Sickness  and  poverty,  cost  of,  115 

Sickness  data,  not  available  through  health 
insurance,  88;  Ohio  report,  crudeness  of, 
95,  96;  difficult  of  comparison,  118,  119 

Sickness,  cases  of  long  duration  exceptional 
in  California,  15,  16;  as  cause  of  work- 
time  loss,  San  Francisco  and  Oakland,  15, 
16;  and  imemployment  correlated,  16; 
not  principle  cause  of  poverty,  21 ;  a  term 
unsuccessfully  defined,  29;  in  Massachu- 
setts, 35,  36;  as  chief  cause  of  destitution, 
California,  42,  43;  compensated,  increase 
of,  under  compulsory  health  insurance, 
47;  not  prevented  by  compulsory  health 
insurance,  .58,  59;  not  reduced  by  social 
insurance,  68;  comparatively  unimpor- 
tant, economically,  in  United  States,  82; 
responsibility  for.  96,  97;  serious,  not  pro- 
vided for.  110;  among  Illinois  wage-earn- 
ers, 117-120;  difficulty  of  definition,  118; 
extent  of,  119;  as  cause  of  poverty,  133 

Sickness  disability,  average  duration  of,  in 
United  States,  39 

Sickness  duration,  28-30,  119,  120 


198 


Sickness  establishment  funds,  Massachu- 
setts, 41 

Sickness  incidence,  relatively  low  in  Cali- 
fornia, 15,  16  . 

Sickness  inquiries,  neglected.  Eng.,  163 

Sickness  insurance,  basis  of,  19;  narrow  ap- 
plication of,  in  France.  45;  in  Wisconsin, 
by  labor  unions  and  Fraternals,  82;  vs. 
Workmen's  Compensation,  83;  in  Ger- 
many, 94 

Sickness  insurance  institutions,  Germany, 
data  of,  134 

Sickness  loss,  Massachusetts,  39,  40 

Sickness  prevention,  not  obtained  through 
health  insurance,  70 

Sickness  rate,  California.  29,  30;  and  death 
rates  lower  in  United  States  than  in  Ger- 
many or  England,  57;  increase  of,  Ger- 
many, 186,  188 

Sickness  severity,  119 

Sickness  surveys.  Metropolitan  Life  Insur- 
ance Company,  36,  117 

Sick  Pensions,  Germany,  134 

Smallpox,  industry  not  responsible  for,  1.'51 

Smallpox  and  health  insurance,  164 

Social  benefits,  alleged,  of  health  insur- 
ance, 7 

Social  control,  by  social  insurance,  181 

Social  democratic  party  and  German  social 
insurance,  181,  187 

Social  Insurance  Committee,  (Commonwealth 
Club,  California,  bias  of,  73 

Social  insurance — not  insurance.  7.  129;  a 
delusion  in  Germany,  181,  182;  not  in 
effect  in  all  civilized  countries,  44;  and 
wages,  Germany,  189 

Socialism.  State,  a  menace  to  personal 
liberty,  73,  74;  attempt  to  oppose  by  com- 
pulsory health  insurance,  76;  radical,  ad- 
vanced by  compulsory  insurance,  187; 
fostered  by  social  insurance,  182 

Socialist  Labor  Party's  demands,  Germany, 
71 

Socialistic  experiments.  Germany.  IS.'i 

Social  reform,  pretense  of.  8 

Social  reformers, failure  to  understand  trade 
union  attitude,  27,  28 

Social  unrest  increaserl  by  social  insurance. 
188 

Somerville  Medical  Society,  Mass.,  opposed 
to  health  insurance.  66 

South  Africa,  no  compulsory  health  insur- 
ance in.  113 

Southern  Pacific  Hospital.  24 

Specialized  care  not  provided  in  England, 
122 

Spencer,  Herbert,  on  justice  as  the  root  of 
social  action.  185 

Standard  Bill  for  health  insurance.  9;  op- 
posed by  first  Califortna  Commission,  3.3 

.Standard  of  living,  and  hoallli  insurance.  57. 
121 :  low  in  England.  107 


Standards,    compulsory     health    insurance. 

California,  105 
-State  Board  of  Control,  and  Social  Insur- 

rance,  California  Commission,  105 
.State  Board  of  Health.  Wisconsin.  84 
State  Departments  of  Health,  faiIure^  and 

defeats  of.  55 
Slate  Department  of  Vublic  Health,  Illinois. 

125 
State  Federation  of  I^bor,  California.  <>p 

posed  to  health  insurance,  46;  New  Yr>rk 

favors  compulsory  health  insurance,  89 
.State  health  service,  reorganization  of,  ret  • 

ommended,  Wisconsin,  84 
State  insurance,  lowers  standard  of  life,  107 
State  medical  service  vs.  compulsory  health 

insurance,  8,  20,  88,  107.  109,  1.38,  180; 

approval  of,  Eng.,  142:  demand  for,  Eng.. 

146;  preferable  to  health  insurance.  147: 

suggestion  for.  Eng..  153 
State  organizations  can  supply  best  evidence 

for  or  against  health  insurance.  10-25 
.State  plan  for  health  improvement.  Connec- 

ticut,  89,  90 
Stevedores,  insurance  of.  105 
.Stimson.  Marshall,  oppo.sed  to  health  insur- 
ance for  California,  75.  76.  77 
.Stone.    Warren   .S..  opposed   to   rompulsor\ 

health  insurance,  89.  1.30 
Strikes   not    prevented   bv   >.,„ial   insurance. 

132 
Sullivan.  .1.  W..  reixirl  on  health  insurance. 

103 
Survey  of  European  systems  of  health  in- 
surance. 12 
Survey.  The.  on  health  insurance.  .33 

Taiissig,  Prof.  F.  W..  on  compulsory  health 
insurame.  44.  74.  185 

Taxation,  argument  that  liealtli  insurance 
would  re<Iuce.  47.  48.  49;  increased  by 
compulsory  health  insurance.  74.  132: 
on  account  of  National  Health  Insurance. 
Eng.,  138.  139.  147 

Textile  mills,  sanitary  in  Massachusetl<».  6,3 

Thrift,  volnntarv.  discouraged  by  social  in- 
surance. 74:  for  wage-earners.  35;  volun- 
tary, should  be  encouraged.  81.  84:  of 
Wisconsin  wage-earners.  81;  ignored  by 
advocates  of  health  insurance.  128 

Trade  accident  associations,  expenditures. 
Germany.  135 

Trade  unions  and  members'  illness  provi 
sions,  California.  26.  27 

Trade  unions  altitude  on  social  and  eco 
nomic  problems.  27.  28 

Trade  unions  antl  fraternal  organizations  in 
surance.  Wisconsin.  82 

Treatment,  medical,  special  facilities  for, 
advocated  in  Eng..  1  I0 


199 


Tuberculosis  in  California,  22;  German  ex- 
prricnrc  with,  32;  greatest  single  cause 
of  sickness,  California,  42;  frequency  of, 
Newark  and  New  Jersey,  54,  55;  reduc- 
tion of,  in  Massachusetts,  66;  as  cause 
for  loss  of  working  time.  95,  96;  war  in- 
terference witli,  Germany,  134;  increase  of, 
Kng.,  141;  lack  of  proper  treatment  for, 
Eng.,  155 ;  institutional  treatment  for,  Eng., 
156;  not  prevented  by  health  insurance, 
157,  188;  Nottingham,  Eng.,  164,  165 

Tuberculosis  death  rate,  Connecticut  and 
Rhode  Island,  92 

Tuberculosis  problem,  unsolved,  Eng.,  140 

Tuberculosis  treatment,  California,  108;  un- 
satisfactory. Great  Britain,  108 

Tuberculosis,  National  Association  for  Study 
of,  59 

Tuberculosis,  duration  of  treatment,  Ger- 
many, 32 

Tuberculosis  patients,  duration  of  treat- 
ment, 125 

Tvphoid  Fever,  industries  not  responsible 
for,  131 

Unemployment  and  health  insurance,  43, 

48,  56,  110,  146 
Unemployment  losses  in  California,  16 
United   Kingdom,   industrial   insurance   in, 

1911-1916,  136 
United  States  Public  Health  Service,  reform 

of,  97;  on  causes  of  poverty,  133 
United  States,  social  insurance  in,  129-135 
United  States  Steel  Corporation,  safety  and 

welfare  work  of,  55 
United  States  vs.  United  Kingdom,  nursing 

service.  158 
Universitv  influence  and   social  insurance. 

130,  187 

Vaccination,  Eng.,  164 

Vaccine,  of  no  value  in  influenza.  Ill 

Valuation  methods,  English  health  insur- 
ance, 138 

Venereal  diseases,  misstatements  regarding. 
98 

Victoria,  German  life  insurance  Co.,  growth 
of.  102,  126;  industrial  insurance  of,  1892- 
1917,  136 

Voluntary  basis  of  true  insurance,  8 

Voluntary  health  insurance  agencies  in  Cali- 
fornia, 12 

Voluntary  health  insurance,  in  Europe.  98 

Voluntary  insurance,  restriction  of,  Eng., 
140 

Voluntary  provision  against  sickness  in 
California,  25,  26 

Voluntary  vs.  compulsory  insurance,  106, 
135 


Voluntary  vs.  compulsory  medical  attend- 
ance, 144 

Vote  on  comj)ulsory  health  insurance  by 
Commonwealth  Club,  79 

Vote  on  constitutional  amendment,  Cali- 
fornia, 111,  112 

Wages  lowered  by  compulsory  health  in- 
surance, 74 

Wages  and  hours  of  labor  vs.  compulsory 
health  insurance,  50,  51 

Wages  and  hours  as  trade  union  problems, 
28 

Wages  and  housing  vs.  health  insurance, 
155 

Wage  reductions,  on  account  of  health  in- 
surance, 185,  189 

Wage-earners,  California,  alleged  condition 
of,  14;  estimate  of  number  of,  in  Cali- 
fornia, 30 

Waiting  period,  cash  benefit.  Ohio  Com- 
mission. 100;  sickness  benefit.  118-120 

Walcott,  Dr.  W.  W.,  on  fraternal  orders  and 
sickness  insurance,  40,  41 

War.  effect  of.  on  finances  of  English  health 
insurance,  138-140;  possible  effect  of,  on 
German  social  insurance,  185 

War  charity,  Germany,  menace  to  social  in- 
surance institutions,  188 

War  loans,  social  insurance  institutions, 
Germany,  135 

Warren.  Dr.  B.  S.,  on  health  insurance,  41 

Wealth,  false  conception  of.  Prof.  Com- 
mons', 86 

Weidler,  W.  B..  on  old-age  pensions.  Great 
Britain.  94 

Welfare  work  by  Massachusetts  employers. 
63;  in  industrial  establishments.  64;  of 
private  insurance  companies.  69 

\^Tiarf  labor  and  English  health  insurance. 
107 

William  I  and  social  insurance,  182.  188 

Wisconsin  Special  Committee,  report  of, 
80-86 

Woll,  Matthew.  Illinois  Health  Insurance 
Commission.  114 

Woodbury,  R.  M.,  treatise  on  social  insur- 
ance. 7 

Workmen's  accident  insurance,  Germany. 
134 

Workmen's  Compensation  Act,  Massachu- 
setts, extension  favored,  64 

Workmen's    compensation,    as    prelude    to 
health  insurance.  6;  and  safety  first.  13. 
72;   not  comparable  with   sickness  insur- 
ance. 45.  98:   and  health  insurance.  83; 
and  occupational  diseases.  92 

World  conquest  and  German  social  insur- 
ance. 186 


200 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

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